Vastavam web: Punishing US tariffs on Chinese imports took effect today, marking the start of President Donald Trump’s trade war with the largest American trading partner and intensifying the anxieties of global industry.Beijing said it was “forced to take necessary countermeasures” after Trump imposed 25 per cent duties on about USD 34 billion in Chinese machinery, electronics and high-tech equipment including autos, computer hard drives and LEDs.
China was expected to respond dollar-for-dollar but did not immediately release details of the countermeasures, which were expected mainly to target agricultural products in a bid to hurt Trump supporters.But it could just be the opening skirmishes in the war, as Trump has vowed to impose tariffs on as much as USD 450 billion in Chinese goods, the vast majority of imports.
The arrival of the long-threatened tariffs marked the failure of months of dialogue between the world’s two largest economies and came amid hand-wringing from industry leaders who fear shrinking markets, higher prices and slower growth.US officials accuse China of building that country’s emerging industrial dominance by stealing the “crown jewels” of American technological know-how through cyber-theft, forced transfers of intellectual property, state-sponsored corporate acquisitions and other underhand practices.
And they say the current US economic strength, as well as America’s soaring trade deficit in goods, means the world’s largest economy can outlast its rivals in the current tit-for-tat battle, presenting Washington with a rare window of opportunity to settle old scores.The US trade deficit in goods with China ballooned to a record USD 375.2 billion last year, further stoking Trump’s ire.But, aboard Air Force One yesterday, Trump erased any hope of an about-face. He said Washington stood ready to slap duties on hundreds of billions more in Chinese imports once today’s tariffs took effect.
As the tariffs’ start approached at midnight, the US central bank warned the impending trade battle was beginning to darken the otherwise blue skies of the robust American economy, now starting its 10th year of recovery.Businesses around the United States told the central bank that spending plans had been scaled back or postponed and they also warned of further adverse effects from the trade conflict, according to a Federal Reserve survey.An industrial survey confirmed that companies were white-knuckling their way through Trump’s intensifying, multi-front trade assault.The start of the trade war likely confirms the widening rupture between Trump and his own Republican Party, a traditional champion of free trade and big business whose members, while critical, have so-far shrunk from curtailing the White House’s trade powers.But, with the GOP facing strong political headwinds ahead of November’s mid-term elections, China’s countermeasures left both Trump and Republican lawmakers increasingly vulnerable to voters who appear likely to boost the fortunes of opposition Democrats.