US hits China with $34B round of tariffs; Beijing strikes back

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Chinese exporters have reported US orders fell off ahead of the tariff hike.

Team Trump and China slapped tit-for-tat tariffs on $34 billion worth of United States and Chinese imports on Friday, with Beijing accusing Washington of triggering the "largest-scale trade war" as the world's two biggest economies escalated their battle.

Beijing vowed to take "necessary countermeasures" after the United States imposed 25 percent duties on about $34 billion in Chinese machinery, electronics and high-tech equipment, including autos, computer hard drives and LEDs.

"After the USA unfairly raised tariffs against China, China immediately put into effect raised tariffs on some U.S. goods", said Foreign Ministry spokesman Lu Kang. The company blamed it on the trade dispute between the U.S. and China, saying the tariffs will result in "fewer than expected SUV sales and higher than expected costs".

Market economists reckoned that every $100 billion of imports affected by tariffs would take away around 0.5 percent of global trade.

Because of this first round of hostilities, American businesses and, ultimately, consumers could end up paying more for such Chinese-made products as construction equipment and other machinery.

President Donald Trump argues that new tariffs on Chinese goods are created to protect USA businesses and force China to change its economic policy.

"A trade war benefits no one, because it hurts free trade and the multilateral process", Chinese Prime Minister Li Keqiang (李克強) told a summit with 16 EU and Balkan countries in Sofia.

A DBS analysis shows that South Korea, Malaysia, Taiwan and Singapore are the economies most at risk in Asia based on trade openness and exposure to supply chains.

But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals.

On the streets of Beijing, there were some concerns that prices would rise due to the tariffs but also a determination to support the Beijing authorities in the trade war.

"However, we can't rule out a full-blown, recession-inducing "trade war"," it said.

MSCI's measure of world equities markets rose 0.4% to the highest level in a week while Asian stocks climbed almost half a percent, led by a rebound in Chinese shares. Trump's attempt to use the steel and aluminum tariffs to pry concessions from the Mexicans and Canadians proved futile. China has also brought a suit against the US over the imposed tariffs in the World Trade Organisation on Friday. The oilseed is the top agricultural commodity that the US ships to China by far and is among the largest products for overall exports. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

"We want open and free markets", Hettinger said.

China's exports to the United States increased by 5.4 percent in the first half, 13.9 percentage points slower than the same period previous year, customs data showed. While Trump's duties do not apply to food products, Souhrada pointed that NAFEM member Henny Penny expects the tariffs to increase the price of their pressure cookers.

Trump has accused China of abusing unfair trade practices and harming USA companies.

American soybean farmers are warning that President TrumpDonald John TrumpWhat to know about Trump's Supreme Court pick so far Bookstore owner calls police after customer confronted Steve Bannon McConnell pushing Trump toward 2 potential Supreme Court picks: report MORE's trade dispute with China will result in "serious damage" to their industry. "What we will likely see happen in the short-term is apples that were destined for export markets will instead overhang the USA market", she said.

"The escalations in the trade conflict have halted for now, pushing up stocks the Chinese yuan", said Jimmy Zhu, chief strategist at Fullerton Markets.

The official China Daily newspaper accused the Trump administration of "behaving like a gang of hoodlums".

"When you don't have a direct impact on something, there's not a lot you can do", he continued.

US President Donald Trump told reporters on Thursday that US tariffs on an additional $16 billion in Chinese goods are set to take effect in two weeks.