China Hits Back After US Imposed Tariffs Worth $34bn

China Hits Back After US Imposed Tariffs Worth $34bn

After a wobbly start, U.S. stocks mounted a broad rally, shaking off two consecutive weekly losses.

As planned, Washington began taxing 818 Chinese goods worth $34 billion early on Friday to punish Beijing for allegedly playing underhand in trade practices and pressuring USA companies to hand over their technologies for doing business in China.

China should "step up efforts from both the supply and demand side and actively cultivate niche markets within the key consumer sectors", the meeting said, according to the broadcaster. And the nation has already become the U.S. apple industry's sixth-largest export market, according to Grondine. "For example, they can quarantine [U.S.] products for a long time".

Stocks edged higher in Europe, with the pan-European FTSEurofirst 300 index closing 0.2 percent higher.

Hours after Washington introduced 25 percent trade tariffs on $34 billion worth of Chinese goods, Beijing retaliated with mirror measures against American imports.

The ministry called the United States actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history".

Although the first exchange of tariffs is unlikely to inflict much economic harm on either nation, the damage could soon escalate.

Beijing, which denies these charges, was swift in responding in kind after the first tranche of planned U.S. levies on Chinese goods announced by President Donald Trump kicked in on Friday. Some American companies that rely on Chinese-made machinery or parts, for example, will eventually have to pass along at least some of their higher costs to customers.

The dispute has hit financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks. Investors have pulled money out of emerging markets and European equities more quickly over the last two months than in 2016, Bank of America Merrill Lynch strategists said on Friday in a weekly note.

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China's retail sales missed expectations in May, rising 8.5 per cent from a year earlier, versus expectations of an increase of 9.6 per cent and compared with a rise of 9.4 per cent in April.

Beijing has accused the USA of starting the "largest trade war in economic history". Liquor maker Brown-Forman, whose products include Jack Daniels, is off 15 per cent since late May. If that were to persist, it could potentially disrupt imports of key products such as pork and soybeans.

China's currency, the yuan, has dropped 3.5 percent against the dollar over the past month, giving Chinese companies a price edge over their USA competition.

Trump ran for the White House on a vow to reverse decades of USA policy by scrapping deals that he said put American manufacturers at a competitive disadvantage and by forcing US trading partners to shrink their trade surpluses with the United States.

Experts expect China to drive the global soybean demand in the next 10 years, which underscores the significance of the market for US soy growers. "It is all a balancing act", said Tim Ghriskey, chief investment strategist at Inverness Counsel. "If they get an indication that this will continue to escalate, that will cause some problems".

Washington slapped the first round of the new tariffs on bilateral imports worth $50 billion for alleged intellectual property and technology theft, while Beijing quickly struck back on an equal amount of American products. The U.S.is effectively requiring Chinese leaders to abandon or scale back a high-tech push that they consider vital to their country's future. Average hourly pay rose just 2.7 per cent from a year earlier, which means that after adjusting for inflation wages remain almost flat.

Substantial they may be, but the average US consumer will likely not see these impacts directly for a little while. Benchmark U.S. crude gained 86 cents, or 1.2 per cent, to settle at $73.80 per barrel in NY.

USA crude rose 1.22 percent to $73.83 per barrel and Brent was last at $77.07, down 0.41 percent on the day.

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