Home / Business / “We are forced to retaliate,” says China after Trump tariffs come into effect

“We are forced to retaliate,” says China after Trump tariffs come into effect



The United States imposed the first taxes on $ 34 billion of Chinese goods in the early hours of Friday, officially launching a trade war between the two largest economies in the world. Moments later, China returned fire and accused the United States of violating the rules of the World Trade Organization and of causing "the greatest commercial war in economic history to date".

"To defend the fundamental interests of the country and the interests of the people, we are forced to retaliate," the Chinese Ministry of Commerce said in a statement.

Although the Chinese declaration did not delineate the targets, Beijing has promised to impose tariffs on an equal amount of US goods, including staple foods such as soy, corn, pork and poultry, a move President Donald Trump said that would force the United States to attack China with liens of up to $ 500 billion in products.

In the short term, analysts say, the measures can disrupt markets and hinder trade in both countries.

"For industries directly affected by tariffs, the impact will be immediate and large," said Yanmei Xie, a policy analyst at China's Gavekal Dragonomics, an economic research firm in Beijing. [19659002] Meanwhile, Russia said on Friday it imposed tariffs on US products in response to steel and aluminum tariffs that Trump imposed in March. Import taxes of 25 to 40 percent will be applied to various industrial products of the United States, including those used in the construction and energy sectors, according to the Minister of Economic Development of Russia Maxim Oreshkin.

The retaliation announced on Friday will provide compensation of almost $ 88 million, much less than the nearly $ 538 million that Trump's fares have cost Russian companies, Oreshkin said. Russia also joined the European Union, China, India and Canada in claims to the WTO on the action of the United States. UU

Still, Russia is not a superior trading partner for the United States. The total trade of goods between countries last year was approximately $ 24 billion, roughly what the United States and China exchange every two weeks.

The risk of escalation, specifically Trump's threat of $ 500 billion against China, worries analysts. "The countdown depends on what Trump will do next," Xie said.

Chinese analysts said the first round would be difficult but manageable, and they prepared for more to come.

"The impact of the first round is not so great, but the key is whether there will be more: a second round of revenge and reprisals and a third round, "said Shi Yinhong, professor of international relations at Renmin University in Beijing. .

The risk of a growing trade war between the US UU And China has business in both countries.

Despite frustration with Chinese business practices, US companies have warned for months that Trump's commercial threats can do more harm than good.

"There are no winners in a commercial war", William Zarit, president of the Chamber of Commerce of the United States. in China, he said in a statement published moments before US tariffs went into effect. .

"While our 900 member companies continue to suffer from lack of equality in China, they are still extremely clear: increased tensions in the economic relationship between the US and China will have a negative impact on their operations in China. China, "he said.

Some US companies rushed to China before the deadline, which was Friday at 12:01 a.m. Eastern time.

The Internet saw a cargo ship loaded with soybeans run towards the port of Dalian in the southern peninsula of Liaoning province. Peak Pegasus was expected to arrive at its destination one hour after China was expected to enact a 25 percent tax on its products, according to data from the Bloomberg ship.

Half an hour before the deadline in Beijing, the ship was passing Jeju from South Korea Island: close, but not completely cut off.

Some said that Beijing's tactics can go beyond tariffs to include arbitrary quarantines and a costly rebound in customs inspections.

Shaun Rein, managing director of the China Market Research Group in Shanghai, said the next move by the Chinese government could be to fan anti-US sentiments among consumers, similar to the boycotts it ordered last year to South Korea's Lotte Group. , which caused dozens of company convenience stores to close.

"If I were Starbucks or Apple," he said, "I would be scared right now."

Trump has pledged for years to address Chinese business practices, accusing Beijing of stealing intellectual property from the US. UU and cutting the $ 375 billion The trade deficit of the United States with the country.

Argues that China should buy more American products, and has blamed trade with Beijing for the loss of American jobs throughout the Rust Belt. (Economists say that globalization and increased automation reduced the type of manufacturing operations that US companies have transported overseas in recent years.)

At a meeting in Montana on Thursday, Trump said, again, that China is "killing" us in trade.

Chinese officials, however, project a studied confidence, claiming that the Asian nation is better equipped to withstand turbulence.

"Our commodity market and our labor market are relatively flexible, and our ability of economic sectors related to abroad to make a flexible adjustment is more prominent," said Guo Shuqing, chairman of the Banking and Insurance Regulatory Commission of China, in an interview on Thursday with the Chinese financial newspaper Financial News.

The Chinese side sees Trump's threats as an attempt to contain its economic growth, and has committed to uniting them movement by movement.

"Whether through trade war or other means, the ultimate goal is to make China dependent on the United States," said He Weiwen, vice president of the Center for China and Globalization in Beijing. "That is impossible, China will not accept it," he said, adding that "what happens next depends on the United States, China will be prepared to do the same."

Luna Lin of the Washington Post, Amber Ziye Wang and Yang Liu in Beijing contributed to this report.


Source link