Trump's Trade War Officially Begins - Hit & Run

Trump's Trade War Officially Begins - Hit & Run

Trump's Trade War Officially Begins - Hit & Run

A U.S. -China trade war began one minute after the struck of midnight on Friday, as the Trump administration imposed tariffs on billions worth of Chinese goods.

Consumer Technology Association: "While President Trump says his trade policy is meant to punish China, the numbers show that, in reality, US businesses, workers and consumers will pay the price under this policy", said Sage Chandler, the group's vice president for global trade. "They also will drive up the cost of manufacturing in the USA and risk numerous 1.3 million good-paying manufacturing jobs our industry supports".

Although the Chinese statement did not outline targets, Beijing has promised to slap levies on an equal amount of American goods, including heartland staples like soybeans, corn, pork and poultry - a move President Donald Trump said would compel the U.S.to hit China with levies on up to $500 billion in products.

The Washington Post reported on Wednesday that U.S. companies had already felt Beijing's sting "in the form of stalled product approvals, worker visas and licensing applications".

A Chinese ministry spokesman said the "US is shooting itself in the foot and hurting the world" with its tariff hikes. USA manufacturers and business groups have said the tariffs could increase their costs and lead to higher prices for consumers.

At midnight Washington time, the US imposed new tariffs on $34 billion of annual imports from China.

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US Treasuries gained and gold declined as investors assessed the impact of the escalation in the trade rift.

For the past three months, the "war of words" between the world's two largest economies has gathered pace after the White House pledged to cut the ballooning U.S. trade deficit with China.

The benchmark Shanghai Composite Index fell by as much as 1.52% in the morning before finishing the session up 0.45% on Friday. It also is rooted in the clash between American notions of free trade and Beijing's state-led development model. Beijing has announced reforms this year including ending limits on foreign ownership in its auto industry, but none directly addresses complaints that are fueling its conflict with Washington.

U.S. President Donald Trump upped the ante on Thursday night, warning that the United States may ultimately target over $500 billion worth of Chinese goods.

- At the Port of Oakland, towering stacks of containers moving on and off ships bode well for business, but Port officials say there is concern that the US tariffs on Chinese imports imposed Friday could threaten their bustling trade.

The U.S. Council for International Business (USCIB), which represents many of America's global companies, called on China and the United States to ease tensions and take immediate steps to work through conflict at the World Trade Organization.

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The White House previously described the situation as a "trade dispute" that's justified because of China's own aggressive trade practices and alleged theft of American intellectual property - claims Chinese officials have denied.

The U.S. also has irked some of its closest allies by hiking import duties on steel, aluminum and autos from Europe, Japan, Canada and Mexico. Some have responded by hiking their own tariffs on USA goods.

Trump's confrontational outlook applies to other trading partners as well as China, said Tai Hui, chief strategist for JP Morgan Asset Management, in a report. "Business surveys point to a very positive investment outlook despite ongoing protectionism fears", May said. "In the most extreme case China could undermine the ability of the Trump administration to conclude a nuclear deal with North Korea", Peterson added.

The president has said that the USA trade deficit is proof that the country is losing on the global economic stage.

In Beijing, policy makers are digging in for what could be a protracted fight - one in which they say they won't be the aggressor.

The American Chamber of Commerce in China appealed to both sides to negotiate a settlement.

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Prices are rising, especially for steel and aluminum, and companies are starting to feel reticent about investments or planning to shift production overseas to avoid retaliation against U.S. exports.

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