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China, U.S. in ‘biggest trade war in economic history’

(Wikimedia Commons)

(Wikimedia Commons)

China declared Friday the “biggest trade war in economic history” is now under way after Beijing implemented retaliatory tariffs on some imports in response to U.S. duties taking effect.

 

Wei Jianguo, a former deputy Chinese commerce minister, said the conflict “will last for a long time,” the South China Morning Post reported.

New U.S. tariffs of 25 percent went into effect at 12:01 am. Friday, Washington time, on $34 billion of annual imports from China.

A spokesman at China’s Ministry of Commerce said Friday that Beijing was forced to respond, calling the U.S. tariffs “typical trade bullying,” according to CNBC.

“It seriously jeopardizes the global industrial chain … hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers,” the spokesman said.

China’s Ministry of Commerce accused Washington of violating international trade laws and said it would consider reporting the U.S. to the World Trade Organisation on Friday.

President Trump, on Thursday, warned there is more to come, with tariffs on more than $500 billion of goods possible in subsequent rounds. That’s roughly the total amount the U.S. imported from China last year.

“You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump told reporters aboard Air Force One en route to a rally in Montana, Reuters reported.

The U.S. already has imposed tariffs of 25 percent on imported steel and 10 percent on aluminum from the European Union, Canada and Mexico, triggering immediate retaliation from U.S. allies and protests from American businesses and farmers.

‘New norm of fairness’

Trump has argued that other countries have blocked access to American products while the U.S. gives their companies access to American consumers, and a “new norm of fairness” is needed. Proponents of the president’s policy also point out the steel and aluminum industries, among others, have been hampered by a global excess in production capacity that has been propped up by foreign governmental subsidies.

Opponents of the tariff policy contend it will punish American consumers far more than it will hurt foreign producers or help American producers, raising prices and curbing supplies.

They point to a fresh sign of unease Thursday, Agence France Presse reported, with a business survey showing the U.S. services sector already has experienced supply chain interruptions and rising costs due both to the looming tariffs and those already in place.

“We’re starting to see signs of inflation, not sharp inflation, but definitely inflation,” Anthony Nieves, head of a services industry survey committee for the Institute for Supply Management, told reporters.

White House trade officials insisted the U.S. economy’s recent growth enables it to withstand more pain than its rivals if the war escalates further.

Commerce Secretary Wilbur Ross this week criticized warnings that the tariffs could stifle global economic growth as “premature and probably quite inaccurate.”

Port delays

Reuters cited four sources saying some major Chinese ports delayed clearing goods from the United States on Friday.

An official at a company in Shanghai said the port had put on hold clearing some U.S. imports through customs, but there did not appear to be any direct guidance to hold up cargoes.

Some customs departments, Reuters said, were waiting until they had received official instructions from the central government on whether to start collecting the new import tariffs on hundreds of products.

China’s expanding military might

Meanwhile, a leaked internal Chinese memo indicates Beijing intends to expand its military might offshore so that the communist country will be allowed to “manage a crisis, contain a conflict, win a war” and overtake the United States in military strength, reported Newsweek.

“As we open up and expand our national interests beyond borders, we desperately need a comprehensive protection of our own security around the globe,” the document states.

A military expansion, the report says, will allow China to “more effectively create a situation, manage a crisis, contain a conflict, win a war, defend the expansion of our country’s strategic interests in an all-round fashion and realize the goals set by the party and Chairman Xi.”

The memo makes clear that the People’s Liberation Army is in line with Xi Jinping’s views on socialism for a new era.

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