U.S. increases tariffs on Chinese imports, Beijing reciprocates

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

Trade War Becomes Official as Tariffs on Soybeans and Hundreds More Products Take Effect

"We urge the Trump administration and China to rescind these tariffs that leave our farmers footing the bill".

Chinese policy analyst Yanmei Xie said the impact will be immediate and substantial for industries directly impacted by the USA tariffs.

Shortly after the tariffs took effect, China said it is "forced to make a necessary counterattack" to a US tariff hike on billions of dollars of Chinese goods but gave no immediate details of possible retaliation.

The trade war will between Washington and Beijing will be hard for the U.S.to sustain as many tariff targets are produced by joint ventures in China, predicts one of China's leading economists.

"The duties are typical bullying behavior, which will have a serious impact on the global industrial and value chain and pose obstacles to global economic recovery", China's commerce ministry said.

Companies worry that the spiraling dispute could chill global economic growth, but Asian financial markets took yesterday's developments in stride.

American Soybean Association Chair Ron Moore told CNBC Friday that he is not mad at the president over the trade war, even though he described the effects of Chinese tariffs on soybeans as devastating.

Among the American goods affected are soybeans. China has promised a swift retaliatory strike on an equal amount of USA goods.

The president has said trade wars could be good for the economy - and "easy to win". United States tariffs on steel and aluminum imports have provoked retaliatory measures against billions of dollars of American exports. It's also bigger than the $506 billion of goods that the United States imported from China past year.

The negotiations began in August but have stalled over US demands created to discourage investment in Mexico and to shift auto production back to the United States.

Soybeans are also the state's second highest earning export behind oil. Surprisingly, the people taking the brunt of the economic hit still largely agree with him, NBC News reports, but how long will that last? This is the time of year, he said, when Chinese soy product producers switch from American soy to Brazilian soybeans as they are further along in their growing season. Because frankly, Trump is right to criticize China.

The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union. China accounts for 87 per cent of counterfeit goods seized coming into the United States.

Trump alleges that China uses foreign ownership restrictions, administrative review, and licensing processes to force or pressure technology transfers from American companies. In the run-up to Friday, there was no sign of renewed negotiations between United States and Chinese officials, business sources in Washington and Beijing said. Some fiber originally sold to China was redirected to Vietnam. And that it conducts and supports cyber intrusions into United States computer networks to gain access to valuable business information so Chinese companies can copy products.

The root of the problem for Trump with Canada and Mexico stems from the North American Free Trade Agreement (Nafta), signed in 1994, which the president has called a "disaster" and "one of the worst deals anybody in history has ever entered into".

"If a country wants to raise tariffs, China will respond to defend itself", he said. He reminded that following the decision, Whirlpool announced 200 new jobs in Ohio.

"This makes us less competitive in the global market and with 61 percent of all our current soybean exports going to China, it means that we're likely to see negative effects on soybean prices and farmers' incomes", he said.

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