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The Yang Ming shipping line container ship Ym Utmost is unloaded at the Port of Oakland on Monday.
The Yang Ming shipping line container ship Ym Utmost is unloaded at the Port of Oakland on Monday.
Image: AP/PA Images

Trump's kicks off 'largest trade war in economic history' with China

Beijing said it was “forced to take necessary countermeasures”.
Jul 6th 2018, 7:16 AM 14,334 45

PUNISHING US TARIFFS on Chinese imports took effect early today, marking the start of President Donald Trump’s trade war with the largest US trading partner and intensifying the anxieties of global industry.

Beijing said it was “forced to take necessary countermeasures” after Trump imposed 25% duties on about €38 billion in Chinese machinery, electronics and high-tech equipment including autos, computer hard drives and LEDs.

China was expected to respond dollar-for-dollar but did not immediately release details of the countermeasures, which were expected mainly to target agricultural products in a bid to hurt Trump supporters.

Beijing accused Washington of launching “the largest trade war in economic history” and vowed to take the case to the World Trade Organisation.

But it could just be the opening skirmishes in the war, as Trump has vowed to impose tariffs on as much as €500 billion in Chinese goods, the vast majority of imports.

The arrival of the long-threatened tariffs marked the failure of months of dialogue between the world’s two largest economies and came amid hand-wringing from industry leaders who fear shrinking markets, higher prices and slower growth.

China US Tariffs A Chinese investor listens to a news report on his smartphone as he monitors stock prices at a brokerage house in Beijing. Source: Mark Schiefelbein

The tariffs also made real a campaign-trail pledge for Trump, who has fulminated for years against what he describes as Beijing’s underhanded economic treatment of the United States.

US officials accuse China of building that country’s emerging industrial dominance by stealing the “crown jewels” of American technological know-how through cyber-theft, forced transfers of intellectual property, state-sponsored corporate acquisitions and other underhand practices.

And they say the current US economic strength, as well as America’s soaring trade deficit in goods, means the world’s largest economy can outlast its rivals in the current tit-for-tat battle, presenting Washington with a rare window of opportunity to settle old scores.

The US trade deficit in goods with China ballooned to a record €375.2 billion last year, further stoking Trump’s ire.

But it remained to be seen whether the American president would carry out recent threats to respond to any Chinese retaliation with maximum pressure — raising US duties on Chinese goods in increments of €200 billion until virtually all the goods America buys from its largest trading partner are subject to duties.

But, aboard Air Force One yesterday, Trump erased any hope of an about-face. He said Washington stood ready to slap duties on hundreds of billions more in Chinese imports once the tariffs took effect.

© – AFP, 2018

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