China trade war heats up with tariffs

China trade war heats up with tariffs

Q: Could the tit-for-tat tariffs turn into a full-blown trade war between the United States and China?

China plans to immediately bring relevant US practice to the dispute settlement body of the WTO, and is ready to take countermeasures on USA products with equal force and scale that will be published in the coming days.

Investors are scared amid the volatility as moves aren't related to fundamentals, said Alan Richardson, fund manager at Samsung Asset Management Ltd and added that it will be hard to manage "liquidation risk" as there's no opportunity to diversify. Over the last five weeks stocks have plunged numerous times as investors reacted to tariff developments with shock and concern that an increase in protectionism will hurt worldwide trade and company profits.

"We are drawing more closer to a trade war now, and it's going to hurt the global markets bad for sure", said Qun Liao, Hong Kong-based chief economist with China Citic Bank International Ltd.

Other than steel and aluminum, the tariffs are only threat at this point: the U.S. will have a 30-day comment period before determining the final list of Chinese goods on the hit list, and China also is holding off pending talks.

"We hope that the USA side, with sense and long-term picture in mind, refrain from going further down the wrong path", the Chinese Embassy in the United States said in a statement on Wednesday.

However, experts warn that 2018 could be a different story, calling a trade war between the two gargantuan economies increasingly likely.

Instead they should work toward a "serious negotiation".

According to the 2017 index on manufacturing development published by the Chinese Academy of Engineering on April 2, the top four manufacturing nations in 2016 were the US with a score of 172.28, Germany with 121.31, Japan with 112.52 and China with 104.34.

These proposed tariffs would be Round 2 of the mini-trade war that has already begun: The U.S. last month announced tariffs on imports of steel and aluminum, in part targeting China.

Tommy Wu, a senior economist at Oxford Economics, said that as one of the world's largest exporters Japan could also be at risk. "If someone wants to talk, our door is open", said Wang Shouwen, vice-minister of commerce.

A key irritant is Beijing's long-range industry plan, dubbed "Made in China 2025, " which calls for creating Chinese global leaders in electric cars, robotics, and other fields.

Here's what you need to know about the ongoing trade dispute.

"The best opportunities for resolving the issues through dialogue and negotiations have been repeatedly missed by the U.S. side", Mr Shuang said.

Apple is working on new touchless controls for its displays
Bloomberg reported that Apple is still figuring out how iPhone users can control some tasks by moving a finger near the screen. The curved screens would curve in gradually from top to bottom rather than along the edges like Samsung's screens.

It is also important to remember that the USA economy is more open (i.e. less tariffs and import barriers) than the EU's and Chinese economy.

Fears of a trade war between the world's two largest economies returned to haunt markets on Wednesday, sending US stocks tumbling and sinking European and Asian equities.

"The US is the biggest market in the world and Trump believes that other countries will make concessions in order to keep that access". The good news is China didn't escalate the retaliation. Gold prices jumped as much as 0.9 percent early on, but finished up just $2.90, or 0.2 percent, at $1,340.20 an ounce.

He asks US Trade Representative Robert Lighthizer to look into unfair China's trade practices, with a particular focus on alleged Chinese theft of US intellectual property. "That's our hope", said Secretary of Agriculture Sonny Perdue.

China's efforts to hit back at U.S. pork products - with the US$3 billion worth of tariffs announced earlier this week - could be good news for alternative suppliers, like Germany, Spain and Denmark, von Mehren said.

"This shows that China's manufacturing development still mostly relies on boosting its scale rather than improving quality or innovation", Zhou said.

Before taking further action that might ramp up the risk of an all-out trade war, President Trump might want to reflect on the more than 10-percent decline in the USA equity market that has occurred since the idea of steel and aluminum tariffs were first seriously broached at the end of January.

In New York, the Dow Jones industrial average fell over 2pc at opening as investors continue to worry about the prospect of a full-blown trade war between the United States and China.

Wang said Beijing was willing to resolve these disputes with the USA through dialogue on the basis of "mutual respect and mutual benefit".

Administration officials, however, said they saw no reason to panic.

The tit-for-tat action comes hours after Washington detailed about 1300 Chinese products it meant to hit with tariffs - also set at 25 percent.

Economists had previously warned the Trump administration's move to penalise China with the tariffs could prompt Beijing to retaliate and lead to higher prices for USA consumers.

It said a 25 percent tariff would be imposed and the date the charges will take effect would be announced later. Beijing's list reflects its sensitivity to American complaints that it pressures foreign companies to hand over technology.

If a nation unilaterally raises tariffs against imports from another country (or group of countries), they can refer the matter to the World Trade Organisation for binding arbitration and/or they can retaliate against the first country by raising their own tariffs on the goods they import from them.

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