European firms say China business 'more difficult'

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That would leave less than $100 billion in US goods to subject to a tariff hike, far short of the $200 billion Trump is threatening. Observers fear the next stage would be for the United States to restrict Chinese investment into the US.

The Trump administration has already imposed punishing tariffs on imports of steel and aluminum from Canada, Mexico and the European Union, using national security as a justification.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump said in the statement. Officials also drew up a second list of $16bn in chemical and energy products to hit with new tariffs, though China did not announce a date for imposing them.

The US "practice of extreme pressure and blackmail departed from the consensus reached by both sides during multiple negotiations and has also greatly disappointed global society", China's commerce ministry said in a statement on its website.

The ministry said in a statement on its website that China would take comprehensive measures to "fight back firmly". Rather it is preventing the development of Chinese capacity in high-tech development which it regards as a threat both to its economic and ultimately military supremacy.

"They also considered a second round of tit-for-tat retaliation with $100bn in us and Chinese tariffs".

Later on Friday, China announced its own tariffs on American goods, including a wide range of seafood and agricultural products, many cars and trucks, petrochemicals and an array of medical equipment.

Trump expressed hope about resolving the ongoing dispute, but pledged: "Canada is not going to take advantage of the United States any longer". Initially, 545 USA products valued at $34bn will be targeted by China, mimicking the Trump administration's tariff rollout.

Because Canada's economy is significantly smaller than the US economy, Canadians have more to lose in the event of a trade war, says Ian Lee, an associate professor of business at Carleton University.

"We have China which claims itself a leader in globalisation, talking of the importance of integration, but the cybersecurity law is creating problems". "But it's a joke", Pompeo said. "It's an unprecedented level of larceny". "For many American families, these increased costs will wipe out any gains from tax reform", said Hun Quach, vice president of global trade for RILA.

"Recently, in disregard of our consensus, the United States demonstrated another flip flop to ignite a trade war".

The rhetoric weighed on Chinese stocks on Tuesday, with the Shanghai Composite Index plunging to a two-year low and the yuan coming under pressure.

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On Wall Street, the Dow Jones Industrial Average closed down 1.1% on Tuesday. Those tariffs, set to start taking effect July 6, were matched by China's threat to penalize US exports.

Another warning has come from the chair of the customs law committee of the American Bar Association, Peter Quinter, who described the escalation of the trade conflicts as "frightening".

Such views are spreading in global financial and business circles.

"We have sought where possible to avoid intermediate goods and we have sought to put on the list products which can be easily sourced from either Canadian or non-U.S. suppliers", Freeland said.

The fallout may spread beyond the direct impact of tariffs, too, hurting business confidence and delaying investment decisions in the country, Zhu added.

"I'm really anxious that ... these things are going to get out of control".

"I have an excellent relationship with President Xi (Jinping), and we will continue working together on many issues".

"Asset classes are priced quite high across the board".

"We absolutely understand the centrality of the automotive sector to our economy, to our relationship with the USA and to NAFTA", Freeland said.

It remains to be seen what the Chinese response to the latest measures will be.

Mr Trump said that if China responds to this fresh round of tariffs, then he will move to counter "by pursuing additional tariffs on another 200 billion dollars of goods".

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