US Lawmakers Back Tariffs as China Threatens to Retaliate

US Lawmakers Back Tariffs as China Threatens to Retaliate

Chinese Foreign Ministry spokeswoman Hua Chunying added, "We don't want a trade war, but we are not afraid of it".

U.S. President Donald Trump on Thursday approved the suspension of much-criticized tariffs on steel and aluminum imports from the European Union and six other economies. It has suggested that affected nations could work together to oppose the measures in the World Trade Organization (WTO).

China will also pursue legal action against the USA at the World Trade Organization (WTO) in response to the United States planned tariffs on steel and aluminium imports, the statement said, and called for dialogue to resolve the dispute. It held $1.17 trillion in Treasuries as of January, or about 19 percent of all foreign holdings of US government securities.

The move prompted the biggest percentage plunges in Wall Street's three major stock indexes in six weeks, with the Dow slumping over 700 points, as investors were agitated by the scale of the U.S. tariffs and possible impact on global trade.

Some observers see the proposals as a way to force China to the table faster. "We would get concerned if the tariffs started being blanket, and larger, but for now this seems to be about renegotiating trade deals". A second list of goods, including wine, apples, ethanol and stainless steel pipe, would be charged 15 per cent, mirroring Trump's tariff hike on aluminum. That will be followed by a comment period.

Noting that consultations are the first step in the WTO dispute settlement process, the USTR said if the U.S. and China are not able to reach a mutually agreed solution through consultations, the Trump Administration may request the establishment of a WTO dispute settlement panel to review the matter.

The week's carnage, however, was dominated by the fight over trade involving the two biggest economies in the world: the USA and China.

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"The larger part of China's strategy, though, is to position itself as the good guy in the global economy, protecting the rules of the game from Trump's lawless attacks", he said. Once the World Trade Organization began moderating global trade in 1995, use of Section 301 virtually disappeared. This is the Trump Administration's third WTO consultation request. China was admitted to the WTO in 2001.

China and the USA had benefitted by globalisation, Blackrock's Larry Fink said at the forum. He noted Beijing began a probe of US sorghum in February after Trump announced the steel and aluminum tariffs. For the first time since the Vietnam War, the U.S. Navy aircraft carrier is paying a visit to a Vietnamese port, seeking to bolster both countries' efforts to stem expansionism by China in the South China Sea.

Hours earlier, Trump signed an order that also could result in restrictions on Chinese investment in the United States, saying it would be the "first of many" trade actions.

The measures will be implemented in two stages. China typically responds to trade salvos proportionally, which economists call a tit-for-tat response. The commerce ministry said it is considering a 15% import tax on $977 million worth of American fresh fruits, nuts, wines, and seamless steel tubes, and a 25% levy on $1.99 billion worth of USA pork, recycled aluminum and other goods. "And then we expect the U.S.to retaliate further". But in value terms the items listed by Beijing amount to a mere $3 billion in U.S. exports, a tiny fraction of the $60 billion in Chinese goods being targeted by Washington. He has publicly called on China to shave $100 billion off that figure.

American farmers "should be not necessarily infuriated but close to it", said Wayne Humphreys, who farms corn and soybeans and raises hogs and cattle near Columbus Junction, Iowa.

China "urges the US side to resolve the concerns of the Chinese side as soon as possible" through dialogue and "avoid damage to the overall situation of Sino-US cooperation", it said.

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