United States tariffs on $34B Chinese imports take effect

US China

US 'firing at itself' with trade measures: China

In a statement released shortly after the midnight ET, China's Ministry of Commerce called the tariffs - which impose a 25% duty on $34 billion worth of Chinese exports to the United States - "typical trade bullying" and warned that retaliation would be swift.

Friday's tariff hikes are the first stage in threatened USA increases on up to $450 billion of imports from China over complaints Beijing steals or pressures foreign companies to hand over technology.

The Trump administration sought to limit the impact of the tariffs on United States households by targeting Chinese industrial goods, not consumer products, for the first round of tariffs.

The Commerce Ministry statement didn't provide details on its retaliation.

The Trump administration contends that China has deployed predatory tactics in a push to overtake United States technological dominance.

"On July 6, the USA began to impose 25 percent tariffs on $34 billion worth of Chinese imports". They are undoubtedly reluctant to do much more in response to Mr. Trump's tariffs than impose reciprocal measures of their own, as long as there is any hope of negotiating a settlement.

Mark Cohen, director of the Berkeley Center for Law and Technology and an expert on China, says this all started as a dispute over accusations of Chinese theft of intellectual property, but the Trump administration has expanded and escalated it.

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Washington increased tariffs at 12:01am Eastern time (4:01 GMT) on $34bn worth of Chinese imports, a first step in what could become an accelerating series of tariffs.

He described the potential escalation to reporters aboard Air Force One: "Thirty-four, and then you have another 16 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?"

While Trump touts announcements of jobs created in steel plants due to the tariffs, manufacturing industries warn many more jobs will be lost in companies producing autos, auto parts, appliances and other goods that depend on imported components. It's also bigger than the $505 billion of goods that the United States imported from China a year ago.

In the US, support for the president standing up to China extends to blue-collar Democratic voters who crossed party lines in 2016 to help send Mr. Trump to the White House.

"I strongly urge the Chinese government to fully estimate the negative impact of the trade war on the Chinese economy and adopt practical and pragmatic measures to avoid or mitigate a trade war", Yu Zhi, a professor at Shanghai University of Finance and Economics, said in an interview.

By itself, Mr. Trump's opening salvo, a 25 percent tariff on 818 Chinese imports, worth $34 billion a year, amounts to a rounding error as compared with the overall size of the us and Chinese economies. The tariffs target "industrially significant technologies" according to the Office of the United States Trade Representative, many of those related to China's "Made in China 2025" industrial policy.

On Thursday, Trump warned that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount that the United States imported from China a year ago. But after three rounds of negotiations between the two sides, including a Chinese pledge to significantly increase purchases of American products, Trump chose to go ahead with the tariffs.

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This is a record that no technology company has been able to achieve anywhere in the world, he added. Jio is determined to move India to be the leader in fixed line broadband in the country.

"The U.S. has maintained hegemony in the military and financial fields for many decades".

Adding to concerns this week was a leaked report suggesting Trump had asked his officials to look at pulling the USA out of the World Trade Organisation (WTO) altogether.

Beijing has made the semiconductor sector a key priority under its "Made in China 2025" strategy, which has shifted up a gear after a US ban on sales to Chinese phone maker ZTE Corp underscored China's lack of domestic chips.

"We of course don't want to fight a trade war, but if any country's legitimate interests are harmed, then of course that country has the right to firmly protect their own interests", Lu said.

The figures come as stock market traders, farmers, and whiskey makers watch anxiously as the issue comes down to the wire.

But reaching a deal that's palatable to both sides will be tough.

According to BMI's Mr. Liew, China accounts for nearly 40 percent of sales by USA chip makers such as Micron Technology Inc., Texas Instruments Inc., Intel Corp., and Qualcomm.

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Analysts say China is unlikely to budge on those plans, which it sees as crucial for developing its huge economy.

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