Donald Trump engages in a trade war with China
- Author: Jon Douglas Mar 24, 2018,
Mar 24, 2018, 12:32
"Beijing is extending an olive branch and urging the USA to resolve trade disputes through dialogue rather than tariffs", said economist Vishnu Varathan of Mizuho Bank. The tariffs come as punishment for Beijing's intellectual property practices with many set to focus on technology China is accused of taking from USA companies.
The Dow Jones Industrial Average plunged more than 700 points, while Tokyo closed 4.5 percent lower, Hong Kong fell 2.45 percent and Shanghai sank more than three percent.
"China does not want to fight trade wars". The threat mirrors the USA duty hike of 15 percent on aluminum.
China's commerce ministry warned that a 15 per cent tariff on 120 goods worth nearly United States dollars 1 billion - including fresh fruit, nuts and wine - would be imposed if the U.S. fails to reach a "trade compensation agreement" within an unspecified time frame. And Finance Minister Taro Aso expressed empathy with Washington over protecting intellectual property. It gave no indication of a possible response but a foreign ministry spokeswoman said Beijing was "fully prepared to defend" its interests. "He has apparently miscalculated the situation and underestimated China's resolve and capability to defend its own legitimate rights and interests as well as the price the U.S. has to pay for its recklessness and willfulness", the spokeswoman noted.
Beijing is readying tariffs on 28 products that China imports from the United States ranging from fresh fruits and wine to steel pipes and recycled aluminium worth US$3 billion (S$3.9 billion), a spokesman for the Ministry of Commerce said on Friday (March 23).
China's Ministry of Commerce blasted the USA move as underscoring "typical unilateralism and trade protectionism" and said it would take action to protect the country's interests.
The list announced Friday was linked to Trump's steel and aluminum tariffs, but companies already were looking ahead to a battle over complaints Beijing steals or forces companies to hand over technology.
Meanwhile, The Wall Street Journal today said China is to blame, and not Trump, if there happens to be a trade war between it and the US.
Traders and millers who crush soybeans and rapeseed to make meal and oil in China say there are no signs of panic in the country's vast farming and livestock sector. The move is created to cut the United States trade deficit and prevent alleged misappropriation of U.S. intellectual property. However, Chinese buyers would likely find it hard to get by only using alternatives, because its industry relies so heavily on USA soybeans, he said.
Initial positive results include advances in large aircraft manufacturing, semiconductor technologies, new material, aircraft engine and gas turbine, 5G mobile network equipment and new energy vehicles, according to Miao Wei, the Minister of Industry and Information Technology. The Treasury Department will also propose additional measures.
Alarm over Trump's protectionist leanings mounted earlier this month after he imposed hefty import tariffs on steel and aluminum under Section 232 of the 1962 US Trade Expansion Act, which allows safeguards based on "national security". "China thinks it means one thing, we think it means another". White House officials said the actions came after years of efforts failed to convince China to change its behaviour.
Beijing said on Friday it was considering levying an additional 15 percent tariff on US products including dried fruit, wine and steel pipes, and an extra 25 percent duty on pork products and recycled aluminium in response to USA tariffs on steel and aluminium.