Published: Fri, July 06, 2018
Markets | By Noel Gibbs

‘US shooting itself in the foot with economic blackmail against China’ - Beijing

‘US shooting itself in the foot with economic blackmail against China’ - Beijing

China lashed out at the US Thursday, the day before a trade war is set to erupt between the world's top two economies, saying that Washington is effectively "firing at itself".

China's customs agency said Chinese tariffs on United States goods would take effect immediately after the U.S. duties on Chinese goods kicked in, although Beijing has said it will not be the first to pull the trigger.

"The government has stated its position many times that we will absolutely not fire the first shot", Gao Feng, a spokesman for China's commerce ministry, said today.

Washington's targets for higher border taxes focus on industrial components like PC parts, fuel pumps, construction equipment and autos, according to trade data firm Panjiva.

Economists have for months warned of the potential damage to the USA and global economies from aggressive trade policies that evolve into protectionism, which would raise prices and upend global supply chains.

His company, which sells sauvignon blancs and zinfandels to distributors in China has lost a half-million dollars in orders since China slapped tariffs in April on $3 billion worth of USA fruits, nuts and wine.

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"All we can do is adjust our supply chain here depending on the size of the price increases".

China said Thursday it won't tolerate "threats and blackmail" as it prepares for the U.S.to implement tariffs on billions of dollars worth of Chinese goods.

"The Chinese side is well prepared, and as long as the United States releases the so-called proposed tariff list, we will take all necessary, comprehensive measures to resolutely safeguard our legitimate interests", stated Chinese Spokesman Lu Kang. In the scenario where the USA and China just stick to this round of tariffs - $50bn of imports - and go no further, then the drag on China's economy would be 0.2% point of growth in 2019, according to Bloomberg Economics' calculations.

The Chinese yuan managed a strong bounce on Wednesday, as it extended a recovery from an 11-month low after the central bank sought calm nervous markets and stem the currency's recent tumble.

US carmaker Ford Motor Co said on Thursday it has no plans now to hike retail prices of its imported Ford and Lincoln models in China, despite steep additional tariffs on imported USA vehicles set to come into play on Friday.

In addition to the first tranche of tariffs going into effect Friday and the second coming in weeks, Trump has continued to threaten more action against China unless the country shrinks its trade imbalance with the US. Americans worry that rising Chinese technological prowess might erode US industrial leadership and prosperity. "At that point, the USA will be more interested in negotiations, and the Chinese side will also want to come to the table".

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Other efforts have focused on finding shafts on the mountainside that might serve as a back door to the blocked-off areas. Several fissures have been found and teams have explored some, although so far, none lead to the trapped boys.


China's commerce ministry said on Thursday that the United States is "opening fire on the entire world", warning that Washington's proposed tariffs on Chinese goods will hit global supply chains.

"There is a chance the company will lose money and might go bankrupt", said Tong. Beijing is reportedly targeting United States products such as soybeans, seafood and crude oil.

Friday July 6 is the date when the world's two largest economies are due to slide deeper into a trade conflict that's roiled markets and cast a shadow over the global growth outlook. China vowed to match US moves, using both quantitative and qualitative measures.

Economists are generally wary of tariffs, since they drive up costs for businesses and consumers.

Trump himself tweeted this week that the economy is doing "perhaps better than ever" even "prior to fixing some of the worst and most unfair Trade Deals ever made by any country". That is noon on Thursday in Washington and 5pm United Kingdom time.

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