US President Trump unleashes trade war with tariffs on China

Long- awaited tariff volley fuelled fears of prolonged and escalating battle ■

Beijing/ Washington, July 6: The United States and China slapped tit- for- tat duties on $ 34 billion worth of each other’s imports on Friday, with Beijing accusing Washington of triggering the “largest- scale trade war” as the world’s two biggest economies sharply escalated their conflict.

Hours before Washington’s deadline for the tariffs to take effect, US President Donald Trump upped the ante, warning that the United States may ultimately target over $ 500 billion worth of Chinese goods, or roughly the total amount of US imports from China last year.

China’s commerce ministry, in a statement shortly after the US deadline passed at 0401 GMT on Friday, said that it was forced to retaliate, meaning imported US goods including cars, soybeans, and lobsters also faced 25 per cent tariffs.

China’s soymeal futures fell more than 2 per cent on Friday afternoon before recovering most of those losses, amid initial market confusion over whether Beijing had actually implemented the tariffs, which it later confirmed it had. “We can probably say that the trade war has officially started,” said Chen Feixiang, professor of applied economics at Shanghai Jiaotong University’s Antai College of Economics and Management.

“If this ends at $ 34 billion, it will have a marginal effect on both economies, but if it escalates to $ 500 billion like Trump said then it’s going to have a big impact for both countries.”

Friday’s long- expected tariff volley fuelled fear that a prolonged and escalating battle would deal a blow to global trade, investment and growth, while also damaging US farmers who stand to lose revenues and potentially driving up food prices in China. “Trade war is never a solution,” Chinese Premier Li Keqiang said at a news briefing with Bulgarian PM Boyko Borissov in Sofia before a summit with 16 central and eastern European countries. sd “China would never start a trade war but if any party resorts to an increase of tariffs then China will take measures in response to protect development interests.”