Trump slaps China with $50 billion in trade tariffs on imports

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Just days after the Republican firebrand announced trade restrictions on some of the US's closest allies, including European Union states and Canada, it was confirmed America would impose tariffs of 25 percent on $50billion worth of Chinese goods. "Thus, the growth and inflation impact on the US economy will depend in large part on China's response, as well as the impact trade tensions have on global growth".

Trump has been relentless in his assertion that China and other nations, including the G-7 countries, are taking advantage of the U.S. For example, in a recent tweet he wrote: "If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated".

China has noticed the US statement which said Washington would continue to impose additional tariffs if China takes retaliatory measures.

In a joint statement, the two countries had said that China would "significantly increase" purchases of United States farm and energy products to reduce the trade imbalance.

Boeing garnered about 12.8 per cent of its 2017 revenues from China and is frequently seen as among the more vulnerable USA multinationals to an all-out trade war.

The first wave of tariffs is scheduled for July 6, covering US$34 billion of American goods that range from beef, poultry and seafood to soybeans and cars. But the White House announced at the end of May that the tariffs would move forward despite the deal.

"US-China trade tensions will be long-lasting", said Yifan Hu, regional chief investment officer and chief China economist at UBS Wealth Management told a briefing in Beijing.

The Trump administration is moving forward with its plans to implement tariffs on Chinese goods coming into America. The country's Finance Ministry has announced it will issue import tariffs on 545 product categories.

China said it would retaliate with $US50 billion in tariffs in response, rattling financial markets.

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Trump announced in a statement on Friday that the United States would impose a 25-per-cent tariff on Chinese products that "contain industrially significant technologies".

China retaliated, saying it would impose an additional 25% tariff on 659 United States goods worth $50bn.

In a statement on Friday, U.S. President Donald Trump defended the decision.

Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump's watch and undermine the benefits of the tax cuts he signed into law a year ago.

"I$3 ndividual United States sectors ranging from agriculture to aerospace are vulnerable to retaliation by China", Madhavi Bokil, a senior credit officer at Moody's, said in a client note.

The USTR official said the tariffs were aimed at changing China's behavior on its technology transfer policies and massive subsidies to develop high-tech industries.

China has retaliated against the tariffs in two stages, calibrated with the steps being taken by the US.

China's trade surplus with the US a year ago was about $375 billion. It has also been suggested that Trump's advances against China will do little to slow the country's quick growth in advanced products. In fact, China's other trading partners like - Europe, Japan and few others, have also expressed similar concerns, but Trump has been unusually direct about challenging Beijing and threatening to disrupt such a large volume of exports.

That raises the specter of an intensifying trade war, which would hurt consumers, companies and the global economy. Nor is it clear that removing all trade barriers would eliminate the USA trade deficit.