China vows to fight back as the trade war escalates

Chairman Xi speaks at the National People’s Congress in Beijing

Chairman Xi speaks at the National People’s Congress in Beijing

"The administration's announcement of a potential 10 percent tariff on $200 billion of additional imports from China, including a significant amount of chemicals, is a stunning and unfortunate development for USA manufacturers and consumers", ACC said in a July 11 statement.

The ministry said it "solemnly protests" the latest tariff list published by Washington, calling it "totally unacceptable".

Shares of NXP Semiconductors NXPI fell roughly 4 percent Wednesday after the report.

- South Korea - In March, Washington and Seoul announced an agreement on a revised version of their bilateral free trade accord, giving USA carmakers greater access to the South Korean market.

On Friday, Washington had imposed additional 25 percent tariffs on $34bn of Chinese imports, prompting Beijing to immediately respond with proportionate tariffs on $34bn American goods including seafood and soybeans.

China's government vowed Wednesday to take "firm and forceful measures" as the United States threatened to expand tariffs to thousands of Chinese imports like fish sticks, apples and French doors, the latest salvo in an escalating trade dispute that threatens to chill global economic growth.

The eventual goal is to impose tariffs on 40 per cent of Chinese imports, the same proportion of USA goods hit by Beijing's retaliation, an official told reporters.

White House officials said the president has asked United States trade representative Robert Lighthizer to begin preparations for levies of 10 per cent on a host of consumer products, just days after the two economic giants hit one another with $34bn export tariffs. That prompted fears Beijing, running out of imports for retaliation due to its lopsided trade balance with the USA, might try to disrupt operations of American automakers, retailers and others that see China as a key market.

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The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong".

"Although I have supported the administration's targeted efforts to combat China's technology transfer regime, tonight's announcement appears reckless and is not a targeted approach", said Sen.

"Tariffs are taxes, plain and simple".

Just days after firing the first shot in its trade skirmish with Beijing, the Trump administration unveiled a list of 6,000 Chinese products ranging from toilet paper to baseball gloves that will face a 10pc tariff. The proposed list of goods includes consumer items such as clothing, television components and refrigerators as well as other high-tech items, but it omitted some high-profile products like mobile phones.

Beijing has begun downplaying Made in China 2025, the state-backed industrial policy that has provoked alarm in the West and is core to Washington's complaints about the country's unfair trade practices.

Chinese tactics, the administration said, include outright cybertheft and forcing USA companies to hand over technology in exchange for access to the Chinese market.

The biggest losers were the offshore Chinese yuan, which slipped to an 11-month low, and the Australian dollar, which fell as much as 1.2%.

Unfortunately for markets, no end is in sight, with further retaliatory levies nearly certain to be enacted by China in the coming days or weeks.

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