Published: Sun, June 17, 2018
Global Media | By Derrick Guzman

United States and China Officially in a Trade War over "Unfair Trade Practices"

United States and China Officially in a Trade War over

Yesterday, the Trump administration imposed a 25% tariff on a wide range of Chinese products (659 in total), worth around $US50 billion in annual trade.

"In light of China's theft of intellectual property and technology and its other unfair trade practices, the United States will implement a 25-per cent tariff on $50 billion of goods from China that contain industrially significant technologies", he said. Among the affected $16 billion in US goods include crude oil, natural gas, coal and some refined oil products.

The world's two largest economies have been sparring over trade in recent months, sparking global fears of an all-out trade war.

The second set of 284 newly proposed products, covering approximately $16 billion worth of Chinese imports, are identified as benefiting from China's "Made in China 2025" industrial policy.

The list generally hits industrial goods rather than consumer items, according to the USTR statement.

Earlier on Friday, China vowed to do just that, saying it would strike back, just hours before Trump's statement.

The list of 1,102 products issued Friday includes 818 remaining from a tentative list of 1,333 released in April.

The Chinese government said it would respond in kind to the United States tariffs, which will apply to roughly 1,100 exports and will target China's aerospace, robotics, manufacturing and auto industries.

But the White House maintains that any Chinese countermeasures would be unjust and could be met with further U.S. sanctions.

Shares in USA industrial and materials companies were under pressure on Friday on escalating trade tensions between the United States and China after President Donald Trump announced tariffs on China, which said it would fight back.

After the USA announcement, China's commerce ministry responded by saying that it would "immediately introduce countermeasures of the same scale and strength", although it did not go into detail.

Trump's announcement is an escalation of a long-simmering trade battle between the two countries. Some analysts see a strategic move to target goods in marginal U.S. states that are home to President Donald Trump's base.

American auto giant Ford has sold 338,386 cars thus far in China in 2018, about one-third the number in the USA, and had welcomed a Chinese plan to lower tariffs on auto imports. A further round of trade talks in Beijing earlier this month failed to yield any breakthroughs. However, ten days later, the White House abruptly announced its decision to proceed with the tariffs.

In mid-May, both sides announced a cease-fire after two rounds of trade negotiations.

Agricultural trader Cargill, the largest United States private company, called for dialogue between Beijing and Washington so that businesses, farmers and consumers would not be caught up in an all-out trade war. All have promised to hit back.

"We are assessing the impact these tariffs and any reciprocal action could have on our supply chain and commercial business", said Boeing spokesman Charles Bickers.

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