[080718.EN.BIZ] Trade War Starts With 25pc Tit-for-tat Tariffs on US$68 Billion in Goods

THE United States has imposed sweeping tariffs on 25 per cent on US$34 billion worth of Chinese flat-screen televisions, aircraft parts and medical devices.

China immediately accused the US of starting "the largest trade war in economic history" and responded by imposing 25 per cent tariffs on $34 billion worth of US goods, including soybeans, automobiles, and lobsters.

The US initiated these tariffs after concluding an investigation into some of China's most controversial trade practices. America's new trade barriers are designed to penalise China for doing things like forcing foreign businesses to hand over technology secrets to Chinese companies - many of which are state-owned - in exchange for access to their market.

The US is expected to impose duties on an additional $16 billion worth of Chinese goods in two weeks. And Trump said on Thursday that, depending on how China responds to his tariffs, he's considering hitting another $500 billion worth of Chinese goods.

Both the US and China's initial round of tariffs against each other are designed to sting deeply. The US is targeting high-tech Chinese goods to put economic pressure on Beijing's "Made in China 2025" programme - a Chinese government initiative to transform China into an advanced manufacturing powerhouse.

And China has deliberately targeted big US agricultural exports like soybeans that come from states in the heart of Trump country, where neither the president nor his party want to see economic instability or job losses right before the 2018 midterm elections.

The US has violated World Trade Organisation (WTO) rules, say critics, who accuse President Donald Trump of bullying, and threatening global supply chain, and risk stalling the global economic recovery.

China has promised to defend its interests and inform the WTO and work with countries to defend free trade and the multilateral system. China also vowed to "deepen reform", expand opening up, protect entrepreneurship, strengthen protection of intellectual property rights, and create a favourable business environment for companies from all over the world operating in China.

Source : HKSG.