United States tariffs on Chinese goods to come into effect

United States tariffs on Chinese goods to come into effect

Investors fretted about the escalating trade battle between the world's two largest economies during Tuesday's abbreviated trading session.

On Friday, the world's top two economies are due to exchange fire by hitting $34 billion of each other's exports with steep new tariffs, the first moves in what may become a devastating cycle of retaliation.

"However, if the Untied States adopts taxation measures, China will be forced to fight back to defend the core interests of the nation and the interests of the people", Commerce Ministry spokesman Gao Feng said, according to USA Today.

Mr Gao said the United States tariffs were not so much targetting China as they were the entire global supply chain, as numerous products on the list published by the USA government are made by U.S. and worldwide companies within China.

And Gao noted that of the $34 billion in taxable products on the United States list, about $20 billion - or almost two-thirds - are made by firms with foreign investment, including a "significant portion" from America. The US has claimed that China uses public funds to support its industrial development, which puts US companies at a disadvantage, paying no heed to the fact that China's use of policy and industrial funds to accelerate industrial expansion is a common practice across the world.

China's foreign ministry said Tuesday that Beijing won't hesitate to retaliate against US tariffs and escalate a trade war with Washington if tensions over economic negotiations with the Trump administration continue to rise.

"China will not bow in the face of threats and blackmail", added Mr Gao.

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

The U.S. also has irked some of its closest allies by hiking import duties on steel, aluminum and autos from Europe, Japan, Canada and Mexico.

China's stock market fell sharply on Wednesday as traders anxious about the escalating trade dispute.

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"The central bank will encourage users importing goods from China to use the yuan and not the dollar", officials said.

"China has already made preparations", Lu told a daily news briefing.

China's yuan rose sharply against the dollar on Wednesday, a day after the central bank assured markets it would keep the currency stable amid growing worries about trade friction, although stocks fell.

The list of Chinese products targeted with USA tariffs include vaping devices, rare earth metals and LED light bulbs.

United States markets are closed for Independence Day following a move lower on Tuesday.

In a country where regulation enforcement can vary widely by region, it's hard for analysts to know whether these sudden administrative headaches are a coincidence or the Chinese government following through on threats to make life harder for Americans in business.

A trade war with the United States could hit China's export machine.

"There is a chance the company will lose money and might go bankrupt", said Tong. China is pushing for joint action against the US and WTO, though the European Union has been reluctant to speak out so directly.

A senior Western diplomat told Reuters that there was no sign of any talks at the moment between the two countries, even via back channels.

Trump has threatened to impose new taxes on up to $416 billion worth of goods in coming months if China doesn't meet his trade demands.

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