U.S. tariffs take effect, China warns of 'counterattack'

U.S. tariffs take effect, China warns of 'counterattack'

A spokesperson at China's Ministry of Commerce said Friday that while the Asian giant had refused to "fire the first shot", it was being forced to respond after the us had "launched the largest trade war in economic history".

Trump has enraged such USA allies as the European Union, Canada and Mexico by hitting them - and just about everyone else - with a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.

China was expected to respond dollar-for-dollar but did not immediately release details of the countermeasures, which were expected mainly to target agricultural products in a bid to hurt supporters of US President Donald Trump.

"In order to defend the core interests of the country and the interests of the people, we are forced to retaliate, " said the Chinese Commerce Ministry in a statement.

After that, the hostilities could intensify: Trump said the U.S.is ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing does not yield to USA demands and continues to retaliate.

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

The president's tariffs, the PIIE's researchers conclude, are "a prime example of 20th century tools aimed at the knowledge-embodying trade flows of the 21st century".

These tariffs and China's retaliation comes amid push back from other nations, including China and Mexico, in response to the Trump administration's import tariffs on steel and aluminum.

The dollar fell Friday as markets weighed a stronger-than-expected jobs market with an escalating trade battle between the United States and China.

"President Trump has really left no exit ramps here", Gold told CNBC, adding, "We're in a downward spiral". Beijing is pushing for its China Made 2025 project, the strategy for which involves stealing as much intellectual property as possible, including in telecom and defense industries.

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After months of threats between the two countries, Friday's tariffs are the first to actually go into effect, said North Dakota Trade Office Executive Director Simon Wilson.

China's imports from the United States were just US$130 billion a year ago and so Beijing does not have the capacity to hit back in kind, raising speculation it could respond by creating administrative headaches for companies in China.

And, three, the likelihood of lower global growth, triggered by a trade war and the prospect of supply disruptions, could cause share prices to tank, initiating a flight of capital from emerging markets to the safety of the home market, making currencies and interest rates move in wholly undesirable ways.

"In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China", the state-run China Daily newspaper said in an English language editorial on Friday.

The lists of goods to be hit by tariffs have been updated several times by both administrations.

Carmaker BMW said it could not absorb all of the 25% tariff on the cars it exports to China from a plant in Spartanburg, South Carolina and would have to raise prices.

Trump has railed against Beijing for intellectual property theft and barriers to entry for United States businesses and a $375 billion USA trade deficit with China.

The industry only gained access to the Chinese market - the largest consumer market in the world - about three years ago.

One thing contributing to the unease, said University of Massachusetts Dartmouth economist Michael Goodman, is the global nature of the supply chain.

The group's lobbying efforts have included a social media campaign in which "individual soybean farmers who will be directly affected by the trade conflict attached their photographs to statements appealing directly to the President and his advisors", the group said. "Half of all USA manufacturing jobs depend on exports, (and) one in three acres on American farms is planted for worldwide sales". "We urge the two governments to come back to the negotiation table with the aim of having productive discussions based on achieving results - focused on fairness and reciprocal treatment - instead of escalating the current situation".

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