China warns of retaliation after Trump’s threats of fresh tariffs

Scott Sinklier  Newscom

Scott Sinklier Newscom

"China is also likely to take action against the U.S. service trade, including transport, tourism and education".

President Donald Trump inched closer to an all-out trade war by unveiling plans to impose 10 per cent tariffs on an additional $200 billion worth of Chinese goods if Beijing doesn't bend to USA demands.

"The trade relationship between the United States and China must be much more equitable", Trump said.

On Friday, Mr Trump said he was pushing ahead with a 25% tariff on $50 billion worth of Chinese products, prompting Beijing to respond in kind.

President Donald Trump is calling for 10 percent tariffs on $200 billion in Chinese imports.

The escalating conflict between the world's two largest economies has rattled markets and companies, which fear disruption to their global supply chains.

In a statement published shortly after Monday's announcement, China's Ministry of Commerce called the move "blackmail".

"Our sense is that President Trump believes the Chinese have little latitude to retaliate given the current trade disparity, but Beijing could employ peripheral policies beyond tariffs that serve to further escalate tensions between the two countries", Boltansky and Davaz wrote in a note to clients.

"By putting the tariffs on, that increases the cost for their processors and livestock industry and in the end their consumers, which isn't good for them", said Bardole.

Trump's list will have to undergo a two month comment period before it is finalized.

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China shipped far more goods to the United States ($505 billion previous year, according to USA figures) than came back in the opposite direction ($130 billion). On Friday, that list had been reduced to 1,102 items of the same value, with 818 items worth $34 billion set to be hit with tariffs from July, and the $16 billion remainder to undergo further review and a public hearing on July 24 before a final determination is made.

On Monday, U.S. stocks finished mixed in trading that ended before Trump issued his tariff threat.

Baker says that if China were really determined to strike back at the United States, it would employ what he describes as the "nuclear option" of totally disregarding American companies' intellectual property rights. Neither of those tariffs have gone into effect yet.

If the U.S. becomes irrational and publishes that new list of tariffs, Beijing will take strong countermeasures to safeguard the interests of China and its people, it said.

Still, U.S. companies had $92.5 billion worth of investments in China as of 2016, many of which could face retaliation by Chinese regulators if Beijing is looking for ways to exert pressure on the United States.

"If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another United States dollars 200 billion of goods". He did not say when the new target list would be unveiled.

"The trade war waged by the United States is against both the law of the market and the development trend of today's world".

Months of tit-for-tat trade measures between Beijing and Washington have had a fairly limited impact on currencies up to now. It showed a willingness to do that to South Korean businesses past year during a period of tension between the two Asian countries.

United States companies including Apple (AAPL), GM (GM) and Boeing (BA) generate large amounts of sales in China.

Trump and Canadian Prime Minister Justin Trudeau traded barbs over the steel tariffs at a farcical summit of the G7 richest countries that ended on June 9.

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