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U.S. tariffs take effect, China warns of 'counterattack'

07 July 2018

Washington increased tariffs at 12:01 a.m. ET on $34 billion USA worth of Chinese imports, a first step in what could become an accelerating series of tariffs.

Mr Trump said: "You have another 16 [billion dollars] in two weeks, and then, as you know, we have $200bn in abeyance and then after the $200bn, we have $300bn in abeyance. OK?" Because frankly, Trump is right to criticize China.

The White House had previously said it would consult on tariffs on another $16bn of products, which Mr Trump has suggested could come into effect later this month.

While the United States tariffs aim to cut down the trade deficit, there are worries about how China's retaliatory tariffs will hit the U.S. economy.

"There should be no doubting Beijing's resolve", the newspaper said. But that step drives up costs for USA companies that rely on Chinese-made machinery or components and may force them to pass them along to their business customers, and eventually to consumers.

"If the United States starts imposing additional tariffs, it will actually be charging taxes on firms both in China and around the world, as well as American companies", Feng, said at a news conference in China.

The U.S. Chamber of Commerce, which strongly opposes the tariffs, says the hit could be $112 million, including aluminum scrap, lobsters and crawfish.

The Chinese Foreign Ministry said "retaliatory tariffs" also took effect, but provided no other details.

U.S. officials accuse China of building its emerging industrial dominance by stealing the "crown jewels" of American technological know-how through cyber-theft, forced transfers of intellectual property and state-sponsored corporate acquisitions.

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"US measures are essentially attacking global supply and value chains".

A Chinese ministry spokesman said the "US is shooting itself in the foot and hurting the world" with its tariff hikes.

U.S. Customs and Border Protection officials are due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components. But some products, including thermostats, are lumped into intermediate and capital goods categories.

Beijing and Washington have held several rounds of high-level talks since early May, but the Trump administration has said it is considering expanding the list of targeted Chinese imports.

Chinese buying of soybeans has already ground almost to a halt ahead of the duties. The U.S. government is afraid China is pursuing this in an unfair way.

Minutes later, China's Commerce Ministry issued a statement, saying that "the United States has violated World Trade Organization rules and waged the biggest trade war ever in economic history".

China rejected "threats and blackmail" ahead of a threatened US tariff hike, striking a defiant stance Thursday in a dispute companies worry could flare into a full-blown trade war and chill the global economy.

Starting Friday, the US will tax only 818 of the proposed Chinese products, which are worth about $34 billion a year. China's tariffs on major USA exports like soybeans, sorghum, and autos, target Republican areas ahead of USA midterm elections. Ford said it would "continue to monitor the situation as it evolves". The drop might reflect a deliberate devaluation by the Chinese government to signal Beijing's "displeasure over the state of trade negotiations", according to a report Thursday from the Institute of International Finance, a banking trade group.

U.S. tariffs take effect, China warns of 'counterattack'