China 'Prepared' for Trade War, Unveils Response to Trump Tariffs

China 'Prepared' for Trade War, Unveils Response to Trump Tariffs

Stock markets fell sharply on Trump's announcement, with the Dow Jones Industrial Average falling almost 3 per cent.

To target China, Trump dusted off a Cold War weapon for trade disputes: Section 301 of the U.S. Trade Act of 1974, which lets the president unilaterally impose tariffs.

The US administration's increasing focus on punishing China was evident in its decision to exempt allies like the EU, South Korea, Brazil, Canada and Mexico from what were supposed to be worldwide tariffs on steel and aluminium imports.

China has urged the United States to "pull back from the brink" as U.S. President Donald Trump's plans for tariffs on up to $60 billion USA in Chinese goods, while events in the South China Sea and at the United Nations suggest a broader pattern of worsening relations.

"If they, the administration, are moving in the direction that goes through the WTO that are not tariffs, that are done with key partners like the European Union and Japan, we think that's really encouraging and that's the direction the conversation should go", said Josh Kallmer, the Information Technology Industry Council's senior vice president of global policy, in an interview. "We will retaliate. If people want to play tough, we will play tough with them and see who will last longer", Chinese ambassador Cui Tiankai said in a video posted to the embassy's Facebook page.

When the US offered the country the chance to negotiate a solution to resolve the situation and fix their relationship with the USA they, instead, denied it.

Beijing says the new law is meant to strengthen the protection of personal information and combat online fraud.

Trump has repeatedly accused Beijing of unfair trade practices like currency manipulation - which helps China make its exports more affordable - and of stealing USA intellectual property. He told reporters, "This is the first of many". The ministry urged the U.S.

As an economist and expert in global trade, I don't see how the proposed tariffs will resolve either one. "Even so, it remains way short of his campaign pledges and-at a maximum-will shave a fraction of a percent off Chinese GDP over a number of years".

The U.S. Trade Representative will publish a "long list" of proposed tariffs within 15 days. But if the countries granted exemptions are removed from that total - including Canada and Mexico, whose exemptions had already been announced - then less than a third of U.S. steel imports would be subject to tariffs. The following day, Beijing hit back, saying it would levy 15 per cent tariffs on 120 types of U.S. products, including fruit, wine and steel pipes, worth US$977 million, and 25 per cent tariffs on a further eight other categories of goods, including pork and recycled aluminium, worth US$2 billion, if the tit-for-tat spat was not resolved. After evaluation, China could then implement tariffs of 25 percent on around $2 billion worth of product imports, including pork and aluminum.

China is preparing to enforce its own tariffs.

The latest proposed Chinese tariffs would add a 25 percent charge on pork and aluminum scrap, mirroring Trump's 25 percent duty on steel, according to the Commerce Ministry. They started as tariffs on the entire world. "The direct macro impact tends to be limited".

"Disrupting trade flows will jeopardise the global economy at a time when economic recovery, though fragile, has been increasingly evident around the world". Close U.S. ally Japan also is seeking to avoid the tariffs on its products. Central bankers have also sounded warnings.

The Trump administration is framing the move as a major turning point in U.S.

US diplomats, business leaders and many experts, though, blame China for consistently failing to address long-standing demands to open its markets further.

China has assembled a list of 128 US products in total that could be targeted if the two countries are unable to reach an agreement on trade issues, the ministry said.

To contact Bloomberg News staff for this story: Andrew Mayeda in Washington at.(JavaScript must be enabled to view this email address), Toluse Olorunnipa in Washington at.(JavaScript must be enabled to view this email address), Miao Han in Beijing at.(JavaScript must be enabled to view this email address).

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