Why they fight: USA and China brawl over high technology

Galtero Lara
Julio 11, 2018

China's threatened tariffs on $34 billion of USA goods will take effect from the beginning of the day on July 6, a person with knowledge of the plan told Reuters, amid worsening trade tensions between the world's two largest economies.

Coming on the heels of escalating tensions between the United States and China over tariffs and investment restrictions, the injunction sparked selling in other US chip makers.

Chinese President Xi Jinping's government has issued a list of USA goods for possible retaliation, but the Commerce Ministry said it will wait to see what Washington does. It gave no immediate details of possible retaliation but Beijing earlier released a target list of American goods for duty increases including soybeans, electric cars and whiskey.

Ok, so it's not a real war - but the USA and China are at the beginning of a trade war - and no-one knows just how bad it could get.

Later that day, China's foreign ministry spokesperson announced that China has begun implementing new tariffs of 25 percent on some US goods including automobiles and soybeans. Ambassador Richard Grenell reportedly told representatives from Volkswagen, Daimler and BMW about a US proposal to reduce all auto tariffs.

U.S. President Donald Trump has threatened to escalate the trade conflict with tariffs on as much as $400 billion in Chinese goods if Beijing retaliates against the U.S. tariffs set to take effect on Friday.

Heavy equipment maker Caterpillar, for whom China is also its second-biggest market after the USA, is off 13.5 percent over the same time.

Midnight Eastern Time on Friday marked the moment the administration's tariffs on Chinese imports went into effect.

Trump repeatedly has slammed what he describes as Beijing's underhanded economic treatment of the United States.

A second tranche of 284 goods worth $16 billion is now under review and could be added to the USA list.

One negative outcome for Europe, Herrero said, would be if Trump can push the Chinese into a trade agreement aimed at reducing the USA trade deficit.

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Beijing also accused Washington of breaching trade rules of the World Trade Organisation (WTO). Charlie Souhrada, a vice president of the North American Food Equipment Manufacturers, says the duties could raise the cost of a pressure cooker made by one of its members, Henny Penny. Sinovel has agreed to pay AMSC a total of $52.5 million in restitution.

"The U.S., of course, is now actively breaking down the very global organizations that have supported growth and globalization since the end of World War II and after the fall of the Berlin Wall".

China is the world's fastest growing beef importer and holds tremendous potential for USA beef.

President Trump, meanwhile, has doubled down on what he calls a Chinese/U.S. trade relationship that is "no longer sustainable".

So you don't think these USA tariffs and Chinese counter tariffs today are here to stay?

The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks.

Tariffs on US pork to China could bring losses of more than $9 per head on all hogs slaughtered in the U.S. "I will try my best to support domestic products".

Just days after the European Union retaliation, Harley-Davidson said it plans to move its production of the motorcycles it sells in Europe overseas.

The European Union says it will soon take action to prevent steel produced for the USA market from flooding into Europe due to tariffs introduced by President Donald Trump.

While not on the summit's official agenda, European leaders will voice their trade concerns to Trump, diplomats said.

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