China says tariff hikes on US goods took effect

Trump's escalating global trade dispute has already affected the economy, with punitive duties now in place for steel and aluminium and the White House threatening slap duties on auto imports. But that would only be a few companies or sectors.

Tariffs are border taxes charged on foreign imports. USA shipments have almost ground to a halt since the 25 percent tariffs implemented on April 2.

The new tariffs could just be the opening skirmish in the trade war, as U.S. President Donald Trump has vowed to hit as much as $450 billion in Chinese goods, the vast majority of that country's imports. The Trump administration has launched a national security investigation into automobile imports that could lead to additional tariffs.

The head of the EU's executive, Jean-Claude Juncker, will head to Washington in late July to try to personally persuade Trump against further measures targeting Europe.

Have US trade partners retaliated?

Growth previous year was the strongest in a decade, since before the global financial crisis. Britain's FTSE 100 fell 0.3 percent.

"Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports", said John Heisdorffer, president of the American Soybean Association (ASA), in a statement. "Simply put, the United States is opening fire on the whole world, and also firing at itself", China commerce ministry spokesman Gao Feng said on Thursday.

The U.S. Meat Export Federation predicts added tariffs on pork and beef will cost U.S. farmers and ranchers. Trump has threatened to hit back with vehicle tariffs of 20%, which would be highly damaging for the German auto industry. The products would, of course, be significantly more expensive and the range probably more limited. Of those, 81,000 - worth $2.37 billion - went to China.

Brussels shares Washington's concern about China's closed markets and what western governments say is Beijing's manipulation of trade to dominate global markets. The fear is that retaliation will spiral, hitting the total amount of global commerce.

They are imposed to increase the price of foreign goods to make domestic produce cheaper in comparison, with the aim of protecting local firms from global competition. Some economists question the accuracy of the official figures, yet the US Census Bureau shows America bought $376bn more of Chinese goods than the total value of all US goods sold in the Asian country a year ago.

Reflecting expectations that small U.S. companies are less at risk than multinationals from tariffs, the Russell 2000 index has outperformed the S&P 500, Dow and Nasdaq since early March.

WTO spokesman Dan Pruzin has cited concerns expressed on Twitter by WTO Director-General Roberto Azevedo about new "restrictive measures" before 25-percent USA tariffs on $34 billion worth of Chinese imports took effect.

FILE PHOTO: The label of a Washington DC sweatshirt bears a US flag but says "Made in China" at a souvenir stand in Washington, DC, US, January 14, 2011.

ENERGY: Benchmark U.S. crude picked up 36 cents to $74.50 per barrel in electronic trading on the New York Mercantile Exchange. The EU and China agreed last month to deepen commercial ties and support trade rules. Trump said it was to protect USA security interests.

Trump has railed against Beijing for intellectual property theft and barriers to entry for U.S. businesses and a $375 billion United States trade deficit with China. The head of the European Commission, Jean-Claude Juncker, said Mr Trump's fixation on a USA trade deficit in goods ignores a services surplus.

"If China concedes to the US proposed agreement, the whole situation faced by the European Union would be much tougher", she and Xu wrote in a research note.

Analysts said this was the quiet before the storm, with US exports likely to fall off in the third quarter as both sides feel the effects of worsening trade relations.

(Copyright © 2015. All Rights Reserved.)
 
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