US, China trade measures could impact global economy

Chinese official warns against trade war, says economic globalisation will be 'beneficial for all'

China Warns US of 'Serious Consequences and Negative Impact' of Trade War

The Shanghai Composite index closed 3.6 percent at 3,152.76 points, its lowest close since Feb 9. China claimed that the slides back its stance.

"China's innovation achievements are earned by the wisdom and sweat of 1.3 billion Chinese people, not by stealing and not by robbing anyone, " Foreign Ministry Spokesperson Hua Chunying insisted, during Friday's press briefing. According to the White House, the increased tariffs are a result of investigations into alleged China's actions to hinder US market, seeking also to twist and steal USA technological and intellectual copyrights.

Deutsche Bank provided an example of how uncertainty caused by the Trump administration measures could cause chain reactions that would affect other industries.

But it also urged the Trump administration to resolve differences through dialogue.

That will nearly certainly spell a further escalation of tensions.

Indicating that they would retaliate against tariffs announced by President Donald Trump. It is impossible to imagine that they can not. "This can turn ugly on a global scale very quickly".

After Trump's announcement, China's Commerce Ministry said it was proposing tariffs on 128 United States products including pork, wine and seamless steel tubes. The Chinese move includes an initial 15% levied on fruit, nuts, wine and stainless steel pipes.

Moody's said the direct impact of these trade measures on the American and Chinese economies will be limited; but warned that if they escalate, the global economy would be threatened.

Peter Donisanu, an investment strategy analyst for the Wells Fargo Investment Institute, said the risk of a damaging trade war is still low because the Trump administration is targeting specific goods that are not central to China's economy.

"China's response should follow the principle of a precision strike", wrote Mei Xinyu, a researcher at a Commerce Ministry think-tank in an opinion piece for China Daily. The U.S.is its second biggest. Shares of the German automakers BMW, Daimler and Volkswagen all declined Friday morning, reflecting the importance of the Chinese market to their sales. "Any trade war will only lead to a lose-lose situation".

Terry Ulrich grows wheat corn and soybeans and raises cattle alongside his family near Ashley N.D
Terry Ulrich grows wheat corn and soybeans and raises cattle alongside his family near Ashley N.D

"China also appears to be breaking WTO rules by imposing mandatory adverse contract terms that discriminate against and are less favourable for imported foreign technology". Last year, the United States imported $506 billion in goods from China.

In contrast, trade in the yuan was quiet on Friday, weakening in the morning session before rising just 27 pips against the US dollar to 6.2361 by 0718 GMT.

Senior White House economic advisor Everett Eissenstat said Thursday the new USA import duties would target sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from U.S. companies". He predicted tough talks ahead. He's also a representative to the American Soybean Association board of directors. "I have tremendous respect for President Xi", Trump said.

"The only thing we are interested in seeing from the Chinese side is action", one senior official, who was not authorized to speak on the record, told reporters.

The Communist Party-run tabloid Global Times said Beijing wouldn't blink in a trade war.

Trump argues that previous USA presidents were way too soft on China. That could change if it puts tariffs on products like electronics or appliances imported from China.

China owned $1.17 trillion in Treasuries at the end of January, compared with $14.8 trillion in total U.S. public debt, according to U.S. Treasury data.

The American Chamber of Commerce in China said its members wanted the US administration to advocate more strongly for a level playing field and reciprocal treatment to improve market access -despite concerns that the current actions could disrupt the global economy.

But China was not spared, with the US President pointing to his country's $504bn deficit with the country and confirming that there would be additional sanctions across a wide range of goods and services from software to fake Ralph Lauren polo shirts. "It's going to make us a much stronger, much richer nation".

"If anything, a few weeks ago we anxious about the economy overheating and inflation picking up", McCain said. They won't do anything to relent on their industrial policy system.

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