This file picture taken on April 5, 2018, shows a sign with a U.S. flag outside a supermarket selling foreign goods in Qingdao, in China’s eastern Shandong province.Getty Images
China’s state media lashed out at U.S. President Donald Trump, accusing the White House of behaving like a “gang of hoodlums” as the world’s two biggest economies headed towards outright trade war on Friday.
The United States was set to impose tariffs on $34-billion of Chinese imports from 0401 GMT on Friday, as Trump warned it may ultimately target over $500-billion worth of Chinese goods, or roughly the total amount that the United States imported from China last year.
Beijing has vowed to respond immediately with an equal amount of tariffs of its own against U.S. autos, agricultural and other products.
A China central bank adviser said the planned U.S. import tariffs on $50-billion worth of Chinese goods – $34-billion plus a planned follow-on list worth $16-billion – will cut China’s economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.
Chinese shares, which have been battered in the run-up to Friday’s tariff deadline, were down in choppy early trade, while the yuan currency also weakened.
Opinion: Relax, nervous Nellies – the trade ruckus will pass
“In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China,” the state-run China Daily newspaper said in an English language editorial on Friday.
“Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it.”
China’s foreign minister said trade protectionism and unilateral actions were “short-sighted” and in a statement on Friday called on European counties to work with China to safeguard a globally free trade system.
On Thursday, China accused the United States of “opening fire” on the world with its raft of tariffs aimed at China, as well as at trade partners in North America and Europe.
The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks. U.S. stocks edged higher on Thursday, however, amid hopes that American trade tensions with Europe may ease after comments from German Chancellor Angela Merkel.
Stocks in Asia were edgy in early Friday trade.
“This is not economic Armageddon. We will not have to hunt our food with pointy sticks. But it is applying the brakes to a global economy that has less durable momentum than appears to be the case,” Rob Carnell, chief economist at ING, said in a note to clients.
NO SIGN OF LAST-MINUTE TALKS
There was no evidence of last-minute negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said.
Beijing has said it will not “fire the first shot” in a trade war with the United States, but has made clear that Chinese tariffs on American goods would take effect immediately after U.S. duties on Chinese goods are put in place.
U.S. Customs and Border Protection officials are due to collect 25 per cent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.
The list avoids direct tariffs on consumer goods such as cellphones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories.
Chinese Commerce Ministry spokesman Gao Feng said on Thursday that the proposed U.S. tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work.
Foreign companies accounted for $20-billion, or 59 per cent, of the $34-billion of exports from China that would be subject to new U.S. tariffs, with U.S. firms accounting for a significant part of that 59 per cent, Gao said.
China has said it would respond with tariffs on hundreds of U.S. goods, including top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa.
The United States is 'opening fire' on the world with its threatened tariffs, China warned on Thursday, saying it will respond the instant U.S. measures go into effect as the two countries locked horns in a bitter trade dispute.
Reuters