Trump Says U.S. Tariffs On Chinese Goods Could Exceed $500 Billion

Trump Says U.S. Tariffs On Chinese Goods Could Exceed $500 Billion

US tariffs on more than 800 goods from China worth $34 billion took effect at 0401 GMT while China's commerce ministry said in a statement shortly after the deadline passed that it was forced to retaliate, meaning $34 billion worth of imported USA goods including autos and agricultural products also faced 25 percent tariffs.

Lu provided no details, but the Chinese Communist Party-run People's Daily said the Chinese General Administration of Customs was carrying out a plan announced last month to impose 25 percent tariffs on a US$34 billion list of U.S. goods, including soybeans, pork and electric cars.

Retaliatory measures "took effect immediately", Chinese Ministry of Foreign Affairs spokesman Lu Kang (陸慷) said.

"This kind of tariff is a typical trade bullying", the statement said, "which is seriously jeopardizing the global industrial chain and value chain security, hindering the pace of global economic recovery, triggering global market turmoil, and will affect more innocent multinational corporations, general enterprises and ordinary countries".

But it could just be the opening skirmishes in the war, as Trump has vowed to impose tariffs on as much as $450-billion in Chinese goods, the vast majority of imports.

Months of dialogue between the two economic superpowers appeared to have failed, with Mr. Trump warning just hours before the tariffs came into effect that Washington was ready to target more Chinese goods.

Analysts say tariffs are not the most effective way of putting pressure on China, which the USA accuses of unfair trade practices and stealing intellectual property from United States companies.

But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals.

Growing trade tension worries some top officials of the US central bank.

The bank estimates that every $US100b of imports affected by the tariffs represents about 0.5 percent of global trade and 0.1 percent of global GDP.

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If items aren't imported before any possible tariffs go into effect, it will lead to "higher prices, a cut into consumer spending and a cut into consumer confidence - and we are very concerned about it".

That's what happened to imported washing machines, which were hit by separate Trump tariffs in January. "It is not only because of China's large market size, but it is also because the Chinese market is stable, rational, and committed to the rule of law".

"Imposing 25% tariffs on United States whiskeys could put the brakes on an American export success story", Christine LoCascio, senior vice president for worldwide trade at the Council, said in a statement.

While China has signalled a willingness to buy more American goods to balance out the deficit, it has refused to trade away what it views as an essential part of its economic future.

United States tariffs on $34bn (£25.7bn) of Chinese goods came into effect on Friday.

Boeing sells a quarter of its planes in China, the second-biggest market in the world, and the USA aerospace giant is neck-and-neck with European rival Airbus.

Trump has threatened to raise tariffs on China to roughly the value of total Chinese exports to the USA previous year of $506bn. Officials in Beijing reject accusations of theft and say foreign companies have no obligation to hand over technology. Trump has declared trade wars as "easy to win" and bet the skirmish will prompt American companies to return operations to the U.S.

"While China's trade behavior is troubling, diplomacy through constructive bilateral processes can achieve the desired objectives without the disproportionate harm to the U.S.", Chandler suggested in a post on the CTA website. Some analysts such as Singapore-based DBS say the United States economy could suffer more than China's, as U.S. levies could affect American firms with investments in the country and Washington is also involved in other trade conflicts. Companies want fairer treatment but will be hurt by U.S.

"For soybean producers like me, this is a direct financial hit", said Brent Bible, a soy and corn producer in Romney, Indiana. "At that point, the USA will be more interested in negotiations, and the Chinese side will also want to come to the table".