China presses Europe for anti-U.S. alliance on trade

GETTYChina's tariff will hit the US first

GETTYChina's tariff will hit the US first

"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.

Midnight Eastern Time on Friday marked the moment the administration's tariffs on Chinese imports went into effect.

The United States is "opening fire" on the world with its threatened tariffs, the Chinese government warned on Thursday, saying Beijing would respond the instant U.S. measures go into effect as the two locked horns in a bitter trade war.

Beijing called the new stage of the confrontation-which began when Washington pulled the trigger on 25 percent duties on $34 billion annual imports of Chinese machinery, electronics and other goods-"the largest trade war in economic history". But it is expected to quickly retaliate with a similar amount of tariffs on American goods, including soybeans, electric cars and whiskey. "We are un-willing to fight, but in order to safeguard the interests of the country and the people, we have to fight if necessary".

Ningbo Top East Technology Co., which makes soldering irons in Ningbo, south of Shanghai, used to export 30 percent of its output to the United States, according to its general manager, Tong Feibing. The company said in a Securities and Exchange commission filing that the tariffs "would have an immediate and lasting detrimental impact to its business in the region". China's imports of American oil have surged over the past year and a half, climbing from $100 million per month at the beginning of 2017 to almost $1 billion per month.

Besides the initial tariffs from the two largest economies, traders are anxious that the trade war could escalate further in the days to come. President Donald Trump , who has claimed that winning a trade war would be easy, has said that he's prepared to drastically raise tariffs on more Chinese imports.

Trump's tariffs are the result of an investigation by the administration into the theft of USA intellectual property by Chinese firms and their government.

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.

"A rise in trade protectionism would increase global risk aversion and disproportionately affect non-USD countries due to their relative economic openness", analysts at Bank of America Merrill Lynch said in a recent note.

China's government also announced it was adding this round of US tariffs to an existing complaint filed with the WTO in April shortly after Washington unveiled the threat to punish Beijing for its policies on intellectual property.

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China retaliated against the announcement with threats of a matching volume of tariffs on US goods.

Later that day, China's foreign ministry spokesperson announced that China has begun implementing new tariffs of 25 percent on some US goods including automobiles and soybeans.

Asian markets erased earlier losses to finish mostly higher as the uncertainty ended over whether Washington would escalate tensions with Beijing.

"This is not economic Armageddon".

It is unclear whether the Trump administration appreciates how integrated the global economy has become or have properly thought through the consequences for the United States if Xi Jinping and the European Union leadership refuse to blink and subsequently cave in to the USA demands that they sell less to the U.S. and buy more from it.

US Customs and Border Protection officials were due to collect 25 percent duties on a range of products, starting on Friday, including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

The list avoids direct tariffs on consumer goods such as mobile phones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories.

The General Administration of Customs of China confirmed the retaliation in a statement on Wednesday, saying that the tariffs would take effect immediately after the USA tariffs kick in.

Beijing had earlier released a target list of $34bn worth of imported USA goods including autos and agricultural products also faced 25 percent tariffs.

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