Trade war erupts as China fights back against USA tariffs

US-China trade war official starts as tariffs imposed on $34B in Chinese goods

Trade disputes are nothing new for the two economic superpowers, and they are not confined to targeting each other.

Beijing is the biggest buyer of US soybeans, importing some $14 billion past year - or about two-thirds of American farm exports to China.

Even though neither Lu nor the Chinese Commerce ministry gave details about the scales of tariffs, Beijing has plans to slap punishing levies 545 United States products worth $34 billion a year that range from soybeans and lobsters to sport utility vehicles and whiskey.

Washington on Friday imposed 25 percent duties on $34 billion of imports from China, the first in a series of possible increases that President Donald Trump says could affect up to $550 billion of Chinese goods.

Beijing previously issued a list of American commodities, including soybean and electric cars, worth $34 billion, which it said would be subject to 25 per cent tariffs.

Noting the launching of Trump's tariffs with the U.S. The oilseed is the top agricultural commodity that the USA ships to China by far and is among the largest products for overall exports.

Commerce Secretary Wilbur Ross this week criticized warnings that the tariffs could stifle global economic growth as "premature and probably quite inaccurate".

"If what the USA wants is to escalate a trade war with China, then so be it". He noted that the new Russian tariffs will only allow a partial compensation of $87.6 million.

Trump maintains the tariffs will pressure China to address trade complaints from the U.S., including intellectual property theft.

At midnight Washington time, the USA imposed new tariffs on $34 billion of annual imports from China.

The impact is already being felt in the markets. No exact date was given.

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

Many economists have voiced concerns that the U.S.

China will also start collecting a 25 percent levy on $US34b of USA goods such as agricultural products and cars.

The government-run English language China Daily newspaper said: "The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China". American officials worry USA industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence. Trump has said he is prepared to impose tariffs on up to $550 billion in Chinese imports - a figure that exceeds the $506 billion in goods that China shipped to the US past year.

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"China is engaged in industrial policies and theft of intellectual property that merits a response, but across the business community we feel that tariffs are not the answer", John Murphy, senior vice president for global policy at the U.S. Chamber of Commerce, told CNBC.

"After the USA activated its tariff measures against China, China's measures against the United States took effect immediately", said Lu Kang, a foreign ministry spokesman.

China's government also announced it was adding this round of U.S. tariffs to an existing complaint filed with the WTO in April shortly after Washington unveiled the threat to punish Beijing for its policies on intellectual property.

"Our view is that trade war is never a solution", Chinese Premier Li Keqiang told reporters in the Bulgarian capital Sofia, after meeting his counterpart.

So long as the USA economy and financial markets continue to chug along, there is little indication that Trump would accept a deal that doesn't include some sort of explicit guarantees related to forced technology transfers, or other industrial policies cited by the United States administration.

Japan's main stock index, the Nikkei 225, gained 1.1 percent while the Shanghai Composite Index added 0.5 percent.

Tokyo closed 1.1% higher and European markets were up more than 1% in morning trading before turning negative on Friday afternoon.

Judging from developments between the world's two largest economies, the trade row is more likely to get worse and worse with no quick fix in sight. It is also diversifying imports away from America.

Beijing insists it's the injured party.

Trump has slapped tariffs on steel and aluminum imports from these countries while a number of them also slapped retaliatory tariffs on USA products, including steel and agricultural products, jeans and motorcycle.

"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?"

On Thursday, Trump showed no signs of backing down from his fight and suggested the possibility of tariffs on nearly $500 billion more of Chinese goods.

Chinese officials reject accusations they steal or force foreign companies to hand over technology.

Why is the USA imposing tariffs?

Businesses around the United States told the central bank that spending plans had been scaled back or postponed and they also warned of further adverse effects from the trade conflict, according to a Federal Reserve survey.

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