US stocks snap higher despite escalating US-China trade tiff

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On top of its existing 12 percent tariff and 10 percent value-added tax, China implemented an additional 25 percent tariff on USA pork products on April 2 in response to US tariffs on imports of Chinese steel and aluminum.

The trade war between the United States and other major economies escalated on Friday after Washington and Beijing launched punitive import tariffs on $34bn (£25.7bn) worth of each other's goods. "We are un-willing to fight, but in order to safeguard the interests of the country and the people, we have to fight if necessary". China's imports of American oil have surged over the past year and a half, climbing from $100 million per month at the beginning of 2017 to almost $1 billion per month. The organization says some states - such as Alabama, Texas and Wisconsin, where Harley-Davidson is based - are likely to see upward of $1 billion in state exports threatened by a trade war with multiple fronts.

Stocks climbed in Asia and the yen slipped with gold, while Chinese shares reversed losses though remained strongly down for the week.

During an official visit to Bulgaria, China's No. 2 leader, Premier Li Keqiang, said "no one will win by fighting a trade war, yet China will take countermeasures in the face of unilateral moves".

And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won't achieve what the Trump administration is trying to accomplish, said Hsu.

He threatened to take action against the huge trade deficit the United States has with China and against what the U.S. describes as China's unfair trade practices, including theft of USA intellectual property.

While market jitters over USA trade policy intensified in recent weeks, Wall Street had a tempered reaction to the rollout of US tariffs on $34 billion in Chinese imports.

The official newspaper China Daily accused the Trump administration of "behaving like a gang of hoodlums" who could do damage to the global economy unless other countries stop them.

Pruzin said the WTO doesn't define "trade war", saying it, "like beauty, is in the eye of the beholder".

China's capacity to directly retaliate is more limited because it exports only about $US130 billion a year to the US. "A deficit is actually a good thing for the USA because we're the world's biggest economic power, and other countries are willing to hold our debt", said Hsu.

"Companies don't know how big this may get, or how it will end".

It is not often that the niche world of commodities trading enters the public conversation, but on Friday China's social media was rooting for a ship carrying soybeans from the United States to beat the deadline before Chinese tariffs kicked in.

While new import duties on USA meat can result in decreased export volumes as US products are priced out of the market, they can also lower prices and margins for exported items as the trade adjusts to the new higher duties.

"This is not economic Armageddon".

The case could be made for manufacturing to shift to these other countries - and for them to take advantage of selling to the USA - but that shift would take time, and it's hard to see who could match China's scale. They range from robots, to aircraft parts, to automobiles.

Beijing earlier released a list of American goods targeted for possible tariff hikes including soybeans, electric cars and whiskey. But some products, including thermostats, are lumped into intermediate and capital goods categories.

Chinese President Xi Jinping's government has issued a list of US goods for possible retaliation, but the Commerce Ministry said it will wait to see what Washington does.