China Cancels U.S. Soybean Purchases as Trade War Takes Hold

Share

China has alleged the United States (US) of commencing "the biggest trade war in economic history" as both the countries slapped tariffs worth billions of dollars on each other's exports.

The initiative of US President Donald Trump to impose 25% duties on imports from China, the total value of which is estimated at $34 bln, came into force on Friday.

China retaliated with taxes on an equal amount of U.S. products, including soybeans, pork and electric cars, calling the move the start of the "biggest trade war in economic history". "Some firms may cut China out of their supply chain, but in other cases it will make economic sense to move US production overseas".

"We are forced to make a necessary counterattack to protect the core profits of the country and the interests of people", it said in expressing readiness to take reciprocal measures against the United States. The company blamed it on the trade dispute between the USA and China, saying the tariffs will result in "fewer than expected SUV sales and higher than expected costs".

But after the US hiked tariffs on an initial batch of $34 billion of Chinese goods on Friday, China retaliated with matching tariffs on an equal amount of USA imports - including soybeans.

President Donald Trump has warned that the U.S.is ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing refuses to yield to US demands and continues to retaliate.

What is more worrisome is that the tariff imposition is only the start of the trade war, not the end of it. Trump has even threatened to target more than $500 billion worth of Chinese goods.

There are no winners in a trade war and tariff measures will not solve the concerns of the US government, according to companies.

Last month, the European Union imposed tariffs on American goods worth United States dollars 3 billion such as yachts, bourbon and motorcycles. Representatives have traveled to each other's countries for meetings in Beijing and Washington, DC.

Bangladesh mainly sourced cotton from India in which the price of the product started to rise as Chinese importers were buying the item from the market after the China government slapped tariffs on the USA cotton, he said.

Chinese Commerce Ministry spokesman Gao Feng said on Thursday that the proposed US tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work.

So these tariffs China is imposing on goods like American soybeans won't, in the long term, affect their production of soy goods but are something American producers have to keep an eye on.

Chinese Premier Li Keqiang said no one will win by fighting a trade war.

The conflict between the world's two biggest economies reflects chronic tension in their relationship as customers, business partners, and increasingly competitors.

The tit-for-tat trade showdown has already impacted soybeans farmers in the Midwest.

The editors then lowered the boom on Trump over his trade bungling, mocking his claim of being a great negotiator.

"Thirty-four, and then you have another 16 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?"

White House Press Secretary Sarah Sanders said while Xi's response was encouraging, the Trump administration needs to see "concrete actions from China". "Generally, these things are lose-lose propositions for both sides in a trade war".

President Donald Trump's administration imposed tariffs on $34 billion worth of Chinese products on Friday. Clearly damaging for the world economy.

Share