The unintended consequences of Trump’s trade war with China

U.S. tariffs take effect, China warns of 'counterattack'

Trump on Friday slapped tariffs on $34 billion in Chinese imports, and Beijing fired back by taxing an equal amount of US products. They kicked in just after midnight ET, which is noon in Beijing.

The president said US tariffs on an additional $16 billion in Chinese goods are set to take effect in two weeks.

Iowa soybean farmer Ron Heck on the impact of USA trade tensions with China on farmers in America.

Beijing insists it's the injured party.

"China is forced to strike back to safeguard core national interests and the interests of its people", the Commerce Ministry added.

According to a Rhodium Group report, Chinese direct investment in the United States was estimated to be 1.8 billion USA dollars in the first five months of 2018, down 92 percent from the same period previous year.

Until then, Heck said the only option for farmers is to wait and see whether the world's two biggest economies settle the tariff discussions.

"The bottom for A-shares is nowhere in sight", said Samuel Chien, partner of Shanghai BoomTrend Investment Management Co.

Hikaru Sato at Daiwa Securities said markets had already factored in the impact of the first round of tariffs.

And Trump said Thursday that higher tariffs on an additional $16 billion of Chinese goods are coming in the next two weeks, setting up what could be a tariff on $550 billion worth of goods - more than the $506 billion in Chinese imports a year ago. It said they would damage the global economy unless other countries stop them.

In the run-up to Friday, there was no sign of renewed negotiations between US and Chinese officials, business sources in Washington and Beijing said.

The president upped the stakes on Thursday, saying the amount of goods subject to tariffs could rise to more than $500bn.

"You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok?"

"We have to be aware that we are only one tweet away from much broader tariffs becoming a reality", she said, adding that investors were trimming broad exposure to riskier assets. What galls them most is the president's justification: Using a little-used weapon in USA trade law, he has declared that the imported metals are a threat to America's national security.

The Trump administration has already rejected a deal for China to enter into long-term contracts to increase purchases of energy and agricultural products from the US.

News of the hold-ups came as Washington imposed tariffs on $34 billion of Chinese imports from Friday.

Still, Heitkamp said "no one should be surprised by this" because "this is what (President Donald Trump) said he was going to do".

President Trump has taken long overdue action to finally address the source of the problem by addressing China's unfair trade practices that hurt America's workers and its innovative industries. Trump's attempt to use the steel and aluminum tariffs to pry concessions from the Mexicans and Canadians proved futile.

"I don't see this ending well", she said.

The Commerce Ministry on Friday criticized Washington for "trade bullying" following the tariff hike that took effect at noon Beijing time in a spiraling dispute over technology policy that companies worry could chill global economic growth. On the other hand, it is expanding restrictions on investments.

In Beijing, the Ministry of Commerce issued a statement shortly after the USA tariffs kicked in accusing the USA of igniting "the largest trade war in economic history".

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