Trump says tariffs to kick in against China

Irving Hamilton
July 11, 2018

According to CNN, a spokesperson for the Chinese Commerce Ministry warned that the us tariffs would backfire, saying, "The United States will be opening fire on the whole world and also opening fire on itself".

The set to impose tariffs on $34 billion worth of Chinese goods starting early Friday morning.

The US first lashed out with tariffs on steel and aluminum, teasing countries to apply for exemptions, of which only a very small number have been granted. The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 2.5527 percent compared with a US close of 2.561 percent. The U.S. has already levied tariffs on steel and aluminum imports from Canada, Mexico, and the European Union, angering those allies and prompting them to retaliate.

Economists usually agree higher tariffs are counterproductive.

Trump's trade team insists that the United States wields a decisive edge over China in a trade war: China sells much more to America ($524 billion last year) than Americans sell China ($188 billion) and so is more vulnerable to tariffs. Newell Brands, which owns Rubbermaid, says Americans may face higher costs for its imported FoodSaver vacuum sealer products, which are used to store and preserve food. Chinese companies have started turning away from US soybean suppliers and looking to other sources for agricultural products.

Trump's tariffs on the EU, Canada and Mexico are for as much as 25% on imports of steel and aluminium, which the United States has imposed on grounds of national security. No exact date was given.

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.

Investors also welcomed new data Friday from the government showing that USA employers kept up a brisk pace of hiring last month, without having to hike wages much. The European slammed the move as protectionism and slapped counter-measures on USA products.

"The United States violated the [World Trade Organisation] rules and launched the largest trade war in economic history to date", the Commerce Ministry said. He did not specify which measures.

He says: "If someone insists on waging a trade war, it would hurt others as well as themselves".

But with the world's two largest economies now slapping potentially punishing tariffs on each other, it looks as if a trade war has arrived. On Thursday aboard Air Force One, the president vowed to implement tariffs on an additional $16 billion worth of imported Chinese goods within the month.

Pruzin said the WTO doesn't define "trade war", saying it, "like beauty, is in the eye of the beholder".

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The report, which shows that unemployment has dropped, also included some numbers that might not be worth the all-caps tweet, including slowed hiring in small businesses and a lack of qualified applicants in some fields, owing, possibly, to wage stagnation.

President Donald Trump on Monday warned the WTO that if the USA isn't treated "properly, we will be doing something".

Chinese Commerce Ministry spokesman Feng Gao said that the proposed US tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work.

Trump himself tweeted this week that the economy is doing "perhaps better than ever" even "prior to fixing some of the worst and most unfair Trade Deals ever made by any country".

The Labor Department said that USA employers added 213,000 jobs in June.

He added that global policy is turning increasingly toward isolationism and lacks cooperation. "It was never comfortable with the West being one bloc", said a European official involved in EU-China diplomacy.

Le Drian said such policies have victims, "but the victims tomorrow will be the Americans themselves". Hu gave no details, but Beijing earlier said it would match the US action by targeting $34 billion of American goods including soybeans, pork and electric cars for higher duties.

By themselves, the tariffs that take effect Friday won't immediately have a dramatic impact on global trade.

The 25% levy came into effect at midnight Washington time. "Investors know what's going to happen and it has already been priced in", said Li Liuyang, senior foreign exchange analyst at China Merchants Bank in Shanghai, referring to the yuan market.

The trade war between the United States and other major economies escalated on Friday after Washington and Beijing launched punitive import tariffs on $34bn (£25.7bn) worth of each other's goods. Despite the prominence of the G7, the bigger concern for the global markets during the quarter was the trade war rhetoric between the USA and China.

"China promised not to fire the first shot, but in order to safeguard the country's core interests as well as that of the people, it is forced to fight back", a spokesperson for China's ministry of commerce said, according to news agency Xinhua. Another crucial trigger point looms tonight, July 6, when a 25% tariff on US$34bn (A$46bn) of imports from China is due to kick in.

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