These U.S.-China tariffs might not be here to stay

These U.S.-China tariffs might not be here to stay

With additional tariffs on Chinese products worth 34 billion USA dollars made effective on Friday, the United States has taken a risky step that will take a toll on its own economy. They kicked in just after midnight ET, which is noon in Beijing.

It said American companies want fairer treatment but will be hurt by U.S.

Beijing insists it's the injured party. In February 2018, USTR won a WTO compliance challenge against China's unfair anti-dumping and countervailing duties on United States poultry exports and China announced the termination of those duties.

On Thursday, Trump warned that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China past year. More than 200 S&P 500 reports are due the following two weeks, including from some USA companies that could be caught in the middle of a US trade war with China. In particular, he pointed to the insurance and bond markets and gave assurances that his country has intellectual property guarantees in place to ensure that German companies need not fear losing proprietary technologies.

USA relations with other major trading partners have also been fraught following the Trump administration's decision earlier this year to slap tariffs on imported steel and aluminum, including those metals from the European Union, Mexico and Canada.

The big question is how far the hostilities between Washington and Beijing will go.

In a further move to escalate tensions between the world's two largest economies, U.S. President Donald Trump said Washington could ultimately raise tariffs on more than $500 billion in Chinese products - almost the total value of U.S. imports from the country previous year. "But it is applying the brakes to a global economy that has less durable momentum than appears to be the case", said Rob Carnell, chief economist at ING, in a note to clients.

"There should be no doubting Beijing's resolve", the newspaper said.

"You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok?"

Canada and Mexico, both members with the USA of the North American Free Trade Agreement (NAFTA), have not been spared the Washington offensive on steel and aluminium, and are threatening their own reprisals.

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Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday.

Despite dire warnings about the impact on the US, Trump believes the robust American economy can outlast its rivals in the current battle.

In 1900, tariffs accounted for about 30% of the total value of U.S. imports, as the country was trying to restrict imports and develop its young industrial sector.

The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union.

"China promised not to fight the first shot, but in order to defend the core interests of the country and the interests of the people, we are forced to take the necessary countermeasures", China's commerce ministry said in a statement.

As the prospect of Chinese tariffs on soybeans grew over the past few weeks, the price of soybeans has fallen sharply.

"There are no winners in a trade war", said the chamber's chairman, William Zarit, in a statement.

"For companies with supply exposure to tariffs, they will move sourcing country of origin if they can; if they can't, they'll pass on as much of the tariff cost as they can, or see a cut in margins", said Jacob Parker, vice president of China operations at the U.S.

"The dynamic is different from anything we've seen", said Boughton.

Analysts said such a trade war would disrupt global supply chains and raise prices for consumers worldwide.

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