Beijing is calling this the beginning of the“biggest trade war in economic history.”
Friday began with the U.S. and China matching each other’s tariffs, dollar for dollar.
CGTN’s Jessica Stone reports.
U.S. President Donald Trump said he’s trying to convince Beijing to improve its protections for U.S. intellectual property.
It’s a battle pitting the U.S. against China over billions of dollars in trade. And Washington fired the first shot.
“We opened our country to their goods, but they put up massive barriers to keep our products and our goods the hell out of their country because they didn’t want that competition,” said Donald Trump, U.S President, at a rally Thursday. “That’s not free trade. That’s stupid trade.”
On 12:01 Friday—Washington slapped 25 percent duties on $34 billion dollars of Chinese products—mainly chemicals, heavy construction vehicles, and components for manufacturing equipment.
Beijing responded immediately—matching that tax dollar for dollar. Many U.S. goods on China’s tariff list are agricultural—including pork, beef, soybeans and apples. Also hit—whiskey, tobacco, and off-road vehicles.
“China would never start a trade war, but if any party resorts to an increase of tariffs, then China will take measures in response, to protect China’s development interests, uphold the authority and efficacy of the WTO, and to save the multinational trade regime,” said Li Keqiang, Chinese Premier.
The U.S. Chamber of Commerce assembled this map to show how U.S. tariffs will hurt American businesses. In the state of Washington—$5.2 billion in products like soybeans— wheat and passenger vehicles. In Louisiana—$5.7 billion, most of it soybeans, but also corn, and grain sorghum. And in California—$4 billion in goods like electric vehicles and passenger cars.
“I think there’s a sense of concern,” David Salmonsen, senior director of American Farm Bureau Federation said. “Intellectual property forced Technology transfer that all this $34 billion is about —those aren’t agricultural issues. We are retaliated against to make a political impact. It’s not about that these are the big issue is that agriculture has with China.
And these could be, just the opening shots.
U.S. President Donald Trump has promised to retaliate against China’s tariffs by slapping duties on an additional $400 billion worth of Chinese goods.
The net result? Many economists predict a loss of competitiveness abroad and a lot of pain at home.
“We will also have job losses inside the United States because these are inputs in U.S.production. And, they will raise the cost of producing in the United States and some of those costs will have to be passed on to consumers,” Mary Lovely of the Peterson Institute of International Economics said.
U.S. markets appear to have been unfazed by the tariff announcements in Friday trading. All three U.S. indices – the Dow, the S&P and the Nasdaq – ended the week higher. The market had already sold off in recent weeks ahead of the expected announcements…and Friday also brought positive news for the U.S. labor market.
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