Published: Mon, July 09, 2018
Money | By Ralph Mccoy

It’s on: US, China tariffs take effect in new trade war

It’s on: US, China tariffs take effect in new trade war

Trump has said he is prepared to impose tariffs on up to $550 billion in Chinese imports - a figure that exceeds the $506 billion in goods that China shipped to the USA previous year.

Beijing insists it's the injured party.

PRICE WATCH: Importers of American retail goods hit by higher Chinese duties were reluctant to pass the costs on to consumers for now.

It further claims that China's industrial policies, such as its "Made in China 2025" plan, harm companies in the United States and around the world.

USTR and the U.S. Department of Commerce said that they were working together to defend the right of the United States to continue treating China as a non-market economy in anti-dumping investigations until China makes the reforms it agreed to when it joined the World Trade Organization (WTO).

OSA cited an Ohio State University study that suggested these tariffs could lead to a 59 percent decrease in Ohio farmers' net income, and a Purdue University study suggesting total USA soybean exports to China could drop by 65 percent.

President Donald Trump said more than $500 billion in Chinese products could ultimately be penalized. He said that it has aggressively sought to obtain technology from American companies and undermine American innovation and creativity.

The big question is how far the hostilities between Washington and Beijing will go.

He described the potential escalation to reporters aboard Air Force One: "Thirty-four, and then you have another 16 in two weeks and then, as you know, we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?"

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"From here, you've got to be really on your game and really talking to the marketing people that you're working with, make sure you're fully informed of what's going to happen", Wilson said.

That amount is higher than an earlier threat from Trump to target as much as $450 billion of Chinese exports.

Among the American goods affected are soybeans. "There should be no doubting Beijing's resolve", the newspaper said.

German Chancellor Angela Merkel, seeking to avoid a trade war, has expressed support for eliminating the EU's auto tariffs.

The Peak Pegasus caused a stir on Chinese social media as it raced to reach China before the tariffs started on Friday and remained berthed at Dalian and fully laden as of Monday afternoon, according to Eikon data. Trump has threatened to hit back with vehicle tariffs of 20%, which would be highly damaging for the German auto industry.

After that, the hostilities could intensify: Trump said the ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing refuses to yield to US demands and continues to retaliate. The damage could also spread to other economies, hurting business confidence and prompting companies to delay investments.

But the conflict could soon escalate. "At that point, the USA will be more interested in negotiations, and the Chinese side will also want to come to the table".

"Meanwhile, American consumers will pay more for cars and health care due to USA tariffs on Chinese-made auto parts and medical instruments", they continued.

"The best way out of this showdown is for the two sides to call a truce and negotiate a new trade understanding".

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