US, China tariffs kick in

US, China tariffs kick in

A man looks at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018.

Trade war tension between the United States and China has been weighing sharply on the global stock markets over the last couple of days - as the US announced that it would start imposing 25% tariffs on nearly 818 goods imported from China.

Weibo users offered encouragement and support to the cargo, which left Seattle on June 8, as it became uncertain whether the ship would dock and unload its cargo before noon on Friday when the new tariffs took effect.

"China is engaged in industrial policies and theft of intellectual property that merits a response, but across the business community we feel that tariffs are not the answer", John Murphy, senior vice president for worldwide policy at the U.S. Chamber of Commerce, told CNBC. These tactics include cyber-theft and requiring American companies to hand over technology in exchange for access to China's market.

"There are no winners in a trade war, and the trend is pointing in the wrong direction", Steen Jakobsen, chief economist at Saxo Bank, said.

I view these tariffs as a negotiating ploy by President Trump to try to force the Chinese to open up their market better for American companies. American officials worry USA industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence.

In a statement released shortly after the tariffs took effect at 2pm AEST, China's Ministry of Commerce called the tariffs - which impose a 25% duty on $US34 billion worth of Chinese exports to the USA - "typical trade bullying" and warned that retaliation would be swift.

Customs at the port of Dalian, where the ship Peak Pegasus was now anchored carrying 70,000 tonnes of US soybeans, have updated their tariffs for the USA goods on Beijing's list to the higher levels, according to a soymeal buyer briefed by a customs official at the port.

Chinese President Xi Jinping's government has issued a list of USA goods for possible retaliation, but the Commerce Ministry said it will wait to see what Washington does. Its responses so far, however, have been more tightly targeted for political impact and it does have a range of non-tariff measures it could use to damage USA companies within China and their supply chains.

The managing director of the Association of German Chambers of Trade and Commerce, Martin Wansleben, also spoke out Monday in favor of strengthening economic relations between his country and China.

The head of the Asia-Pacific Committee of German Business (APA), Hubert Lienhard, said that in the face of a growing protectionist agenda in the U.S., a joint German-Chinese message to the White House "could be one the of things emerging from today's government consultations".

Global markets initially wobbled at the news but soon forged higher with Wall Street finishing up solidly on bullish employment numbers while Asian and European stocks also cast aside their worries, at least for now.

Japan's Nikkei stock index .n225 was 1.1 percent higher after closing at a three-month low on Thursday, while Australian shares .axjo gained 0.2 percent.

The conflict between the world's two biggest economies reflects chronic tension in their relationship as customers, business partners, and increasingly competitors.

It is not the first time the Peak Pegasus has had a starring role in Beijing's trade showdown with Washington.

The ruling Communist Party has insisted on making changes at its own pace while sticking to a state-led industrial strategy seen as the path to prosperity and global influence. They are the first stage in levies threatened by the Trump administration on a total of $450 billion worth of Chinese goods.

If his administration went ahead with that threat, it would raise the total of targeted Chinese goods to potentially $550 billion - more than the $506 billion that China actually shipped to the United States previous year.

Soybeans are the top United States agricultural export to China, with the trade worth $12.7 billion in 2017.

Chinese state media has promoted the message that the European Union is on China's side, officials said, putting the bloc in a delicate position.

Also China Daily: "The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China".

But a manufacturing survey from the Institute for Supply Management shows they are not alone, while other companies say uncertainty is delaying investment plans. He said that would rise to a full 4 percent of the global total if Washington, Beijing and other governments follow through on tariff threats.

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