China trade war breaks out as tariffs kick in

US shooting itself in the foot with economic blackmail against China’ – Beijing

Lee Jae Won Reuters

"To put it simply, the United States is opening fire on the entire world, including itself".

USA tariffs on more than 800 goods from China worth $34 billion took effect at 0401 GMT while China's commerce ministry said in a statement shortly after the deadline passed that it was forced to retaliate, meaning $34 billion worth of imported us goods including autos and agricultural products also faced 25 percent tariffs.

Retaliatory measures "took effect immediately", Chinese Ministry of Foreign Affairs spokesman Lu Kang (陸慷) said.

China's tariffs on hundreds of United States goods include top exports such as soybeans and cotton.

China rejected "threats and blackmail" ahead of a threatened USA tariff hike, striking a defiant stance Thursday in a dispute companies worry could flare into a full-blown trade war and chill the global economy.

Separately on Friday, data showed the U.S. trade deficit in May dropped to its lowest level in 19 months as exports rose to a record level.

The monthly goods trade deficit with the world's second-largest economy widened to $33.2 billion, from $28 billion in April, the report said.

The US on Friday slapped tariffs on $34 billion worth of Chinese imports to combat what is says are the country's unfair trade practices.

Beijing has accused the United States of starting the "largest trade war in economic history".

Months of dialogue between the two economic superpowers appeared to have failed, with Trump warning just hours before the tariffs came into effect that Washington was ready to impose duties on hundreds of billions of dollars more in Chinese imports.

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The president has also slammed the $375 billion US trade deficit with the country, arguing China should purchase more American goods, and has blamed trade with Beijing on the loss of American jobs throughout the Rust Belt.

The US trade deficit in goods with China ballooned to a record $375.2-billion previous year, further stoking Trump's ire.

Mr Trump has already imposed tariffs on imported washing machines and solar panels, and started charging levies on the imports of steel and aluminium from the European Union, Mexico and Canada.

Sinovel has agreed to pay AMSC a total of US$52.5 million in restitution.

On Thursday, Ford Motor Co said that for now, it will not hike prices of imported Ford and higher-margin luxury Lincoln models in China.

Since then, the sides have traded salvos, with the USA focusing its import duties on high-tech equipment while China has targeted products like cars, soybeans, and lobsters - many of which are produced in areas of the US that voted for Trump.

John Heisdorffer, a soybean grower from Iowa and president of the American Soybean Association, said the group had appealed to the Trump administration to find other solutions to addressing trade issues with China.

The start of the trade war likely confirms the widening rupture between Trump and his own Republican Party, a traditional champion of free trade and big business. And where prices don't rise, they may actually collapse when the production that was meant for export ends up getting dumped in the domestic economy instead.

"The global financial crisis, which ensured that we now act in the framework of the G-20, would never have been resolved so quickly, despite the pain, if we hadn't cooperated in a multilateral fashion in the spirit of comradeship", Merkel said on Wednesday.

Moscow also announced Friday it had slapped 25 per cent tariffs on some U.S. goods, joining the global push-back against Trump's offensive.

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