Trump's $500 billion trade threat makes China's already battered investors shiver

Products of beans made by a US company are displayed for sale at an worldwide supermarket Jenny Lou's in Beijing, China June 29, 2018.

Donald Trump has threatened to impose tariffs worth hundreds of billions of dollars on Chinese imports to the USA as a trade war between the world's two largest economies began on Friday.

The Trump administration's 25% tariffs affect more than 800 Chinese products worth $34 billion such as industrial machinery, medical devices and auto parts.

The president said US tariffs on an additional $16 billion in Chinese goods are set to take effect in two weeks.

It is unclear whether the soybean cargo, which did not arrive until after the penalties took effect, will pay the 25 percent higher tariff.

In Beijing, the Ministry of Commerce issued a statement shortly after the U.S. tariffs kicked in accusing the United States of igniting "the largest trade war in economic history".

Chinese President Xi Jinping (left) and US President Donald Trump in Florida a year ago.

The ministry called the United States actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history".

"Trade war is never a solution", said Chinese Premier Li Keqiang.

Thus, the core of the global trading system progressively built up over the past 70 years and the global supply chains and financial system developed over recent decades to facilitate global trade and investment are under threat, along with the still-fragile recovery in the global economy from the financial crisis.

"I think products made in China are the best", said one shopper in a Beijing grocery story, who gave his name as Yang.

Peak Pegasus, together with numerous other trade companies and businessmen, will become the victims of this trade war. The reality is that trade wars are damaging to everyone, not just the participants, and no one will "win".

The 10 per cent fall in the Shanghai stock market over the past weeks might not be wholly attributable to the trade war.

In addition to the $US16b under consultation, Mr Trump has flagged there could be more tariffs in store. Asian equities wobbled but also managed to end up.

On Thursday, a spokesperson for China's ministry of commerce said the USA will be "opening fire on the whole world and also opening fire on itself".

"The bigger the size (of imports facing tariffs), the bigger the potential that the GDP impact is larger than a linear extrapolation would suggest", said Aidan Yao, senior emerging Asia economist at AXA Investment Managers in Hong Kong. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

American companies doing business in China are particularly anxious. China's tariffs similarly totals to $34 billion.

Chinese economist Hu Xingdou said that while China's development would be affected by the trade war, the effects would not be too deep so long as it kept its doors open and deepened its reforms.

Amidst a trade war between the United States and China, a Chinese company is manufacturing flags for President Donald Trump's 2020 re-election campaign, a media report said. He added the USA is ready to target an additional $200 billion, and then $300 billion more should Beijing retaliate. The rest of the world would suffer collateral damage, even if the U.S. were to refrain from penalising imports from other countries.

But the conflict could soon escalate.

The state-run China Daily accused the Trump administration of "behaving like a gang of hoodlums", saying that they would damage the global economy unless other countries stop them.

(Copyright © 2015. All Rights Reserved.)

British Grand Prix strategy guide
Then when Sauber's Marcus Ericsson skidded off with 19 laps left, Hamilton was handed another lifeline with a safety vehicle . An inspired drive saw Hamilton slowly work his way up the grid and finish the race behind eventual victor Vettel.

Webb Simpson's 9-under 61 leads PGA event in West Virginia
Bubba Watson , starting on the back nine, jammed his wrist on a bunker shot on No. 11. Harris English (67) was tied for 24th, with Keith Mitchell (69) tied for 64th.

The reason Kylie Jenner now looks like 'the old Kylie'
I did want to admit to the lips, but people are quick to judge me on everything, so I might've tiptoed around the truth. "I got rid of all my filler" she told a fan after she mentioned Jenner looked "like the old Kylie " in the snap.

Plastic straws are now banned in Seattle
But because of the market, plastic utensils and straws have been exempted in Seattle's ban until now, the newspaper reported. California's Legislature is considering statewide restrictions, but not an outright ban, on single-use plastic straws.

Journey for trapped Thai schoolboys is a perilous, dark labyrinth
Extracting everyone could take up to four days, but the initial success has raised hopes that it can be done. There was no official announcement as to which four boys the divers were able to bring through the cave.

England's victory over Sweden seen by 20m fans
With no official song for England at this year's World Cup , football fans have re-embraced 1996 classic, Three Lions . Even the normally reserved Gareth Southgate let out a cry of relief when the game drew to a close (bottom right).

Britain's Brexit minister David Davis steps down
May replied to his letter to say she did not agree "with your characterisation of the policy we agreed at cabinet on Friday". Britain's Secretary of State for Departing the EU David Davis arrives in Downing Street in London , June 26, 2018.

Trump NATO pressure paying dividends in Europe, US envoy says
Around 1,500 people went out on July 6 in Brussels to protest against the upcoming visit of U.S. Bush and is now a senior vice president at the Center for Strategic & International Studies.

UK's Brexit Secretary David Davis has resigned
But leading pro-Brexit legislator Jacob Rees-Mogg said, "I don't think a no-confidence vote is immediately in the offing". It also urges preparations for the eventuality of a "no-deal" exit.

Nirbhaya’s rapists will hang as Supreme Court rejects review
After being treated at AIIMS, New Delhi , the woman was flown to Singapore for treatment where she died on December 29 , 2012. The Court had reserved its judgement in the matter on May 4 this year after hearing the arguments on behalf of the convicts.

Boullier resigns in McLaren F1 team shake-up
However, in a recent press conference at Silverstone racing track, McLaren Racing CEO Zak Brown revealed that Boullier's departure had been planned in order for the team to have a fresh start.

RSPCA baffled by 'drunk' seagulls spotted staggering around smelling of booze
RSPCA officers Jo Daniel, Clara Scully and Paul Adams have collected several seagulls with the same symptoms in recent weeks. The RSPCA is urging local breweries and distilleries to check waste is secure and that wildlife can not get to it.

Enrique tipped for Spain job
It didn't go well with Spain losing on penalties to Russian Federation in the second round and Hierro quit. The Spanish Football Federation were not immediately available for comment.

Tropical Storm Chris to avoid New England
High surf and unsafe rip currents are expected along parts of the Carolina and mid-Atlantic coasts through early week. Chris formed off the coast of North Carolina on Friday and is now about 160 miles off the coast of Cape Hatteras.

Dominic Raab replaces David Davis as Brexit Secretary
In her reply, Mrs May said: "I do not agree with your characterisation of the policy we agreed at cabinet on Friday". The Tory leader's hard-won proposal was agreed to at her Chequers country retreat after marathon talks on Friday.

More News

More News