Published: Fri, July 06, 2018
Money | By Hannah Jacobs

U.S. is 'opening fire on the entire world' with tariffs, says China

U.S. is 'opening fire on the entire world' with tariffs, says China

It reveals economies like Taiwan, Hungary, the Czech Republic, South Korea, and Singapore could be equally if not more vulnerable to the risk of a trade spat than the two now front and center.

China already has announced it will respond in kind on the same schedule as the United States while President Donald Trump has countered with a threat to double down by progressively ratcheting U.S. penalties up to a total of $450 billion in goods - which would represent the lion's share of all of China's exports to the United States.

U.S. tariffs on a range of Chinese goods will come into effect at midnight on Thursday in what could turn out to be the first fusillade in a trade war between the world's two largest export nations.

Taking a defiant stance, the Chinese Commerce Ministry on Thursday rejected "threats and blackmail".

"The US has provoked this trade war, we do not want to fight it, but in order to safeguard the interests of the country and the people, we have no choice but to fight", Chinese commerce ministry spokesperson Gao Feng said on Thursday. Beijing has promised to retaliate in kind, though it said overnight that it would "absolutely not" fire the first shot in a trade war.

An American company that ships cherries to a coastal province in southeast China recently encountered a new hurdle at the border: Customs officers ordered a load into quarantine for a week, so it spoiled and was sent back to the United States. Separately, China's customs agency said retaliatory tariffs on U.S. goods will come immediately after United States duties on China kick in.

The Canadian dollar edged higher against its US counterpart on Thursday, holding near its strongest in almost three weeks, as the greenback broadly fell and investors' hopes rose that European auto makers could be spared from USA tariffs. That could lead to politically unpalatable job losses.

Prices are rising, especially for steel and aluminum, and companies are starting to feel reticent about investments or plan to shift production overseas to avoid retaliation against U.S. exports.

U.S. Federal Reserve Chairman Jerome Powell said on June 20 that officials are beginning to hear that companies are postponing investment and hiring due to uncertainty about what comes next.

"In the past few decades, China has always been one of the most popular markets for foreign investors". "I will do whatever I can, including layoffs".

The Washington Post reported on Wednesday that United States companies had already felt Beijing's sting "in the form of stalled product approvals, worker visas and licensing applications".

In addition to the first tranche of tariffs going into effect Friday and the second coming in weeks, Trump has continued to threaten more action against China unless the country shrinks its trade imbalance with the US.

This first round of tariffs from the Trump administration focuses on products from the industrial sector that "contribute to or benefit from" Made in China 2025 policies, according to the USA trade authority.

Economists and various experts have warned for months of the risks to the global ecomony posed by a trade war between the United States and China.

"If the USA is determined to escalate conflicts with China, then so be it". The Trump administration has also weighed restrictions on Chinese companies and start-ups in sectors ranging from aerospace to robotics.

"Combining this with China's promise to retaliate against US products and agricultural commodities only further erodes the benefits of last year's tax reform, hurting the entire USA economy", Slater said. Beijing has used such tactics in dustups with various countries, including South Korea, Australia and Norway. The overall value mirrors US tariffs, which also are set to kick in on Friday.

That would slow his research.

In China, what will the economic impact be? "Even if you force domestic technology companies (to improve), it may take a while for them to adapt".

Xi is playing a long game, pursuing what he calls the "Chinese Dream", or "the great rejuvenation of the Chinese nation".

He's sure to steer clear of any obvious backtracking that might make him look weak.

"It has frequently waged wars against other sovereign countries and made use of the dominant influence of the US dollar in the worldwide markets to fleece other countries".

"There's enough of a trend to say this might be related", said Jake Parker, vice president of China operations at the U.S.

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