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Amidst trade war, 'Made in China' flags for Trump's 2020 poll campaign

09 July 2018
Amidst trade war, 'Made in China' flags for Trump's 2020 poll campaign

As the trade war with China - caused by tariffs demanded by Donald Trump - heats up, the editors of the Wall Street Journal have taken the president to task, sarcastically mocking him as a "master negotiator" who has yet to negotiate any deals while causing damage to the US economy.

China's foreign ministry in Beijing said that tit-for-tat duties on USA goods took effect straight away after Washington's 25 percent tariff on $34 billion worth of Chinese goods kicked in at 12:01 a.m. EDT on Friday.

Last month the Office of the U.S. Trade Representative announced an additional 25 percent duty set to be imposed in two stages on 1,102 items representing US$50 billion in Chinese imports.

The government said previously it would hit more than 500 USA export items - including cars and major agricultural goods such as soybeans and meat - worth the same as the Chinese products targeted by the United States.

In response, China immediately slapped an identical tariff on USA imports of the same value, with aquaculture products, automobiles and soybeans the hardest hit.

The Trump administration has already threatened to raise the stakes.

The official China Daily newspaper accused the Trump administration of "behaving like a gang of hoodlums". "We will work with other countries around the world to jointly safeguard free trade and the multilateral system".

There was no sign of renewed negotiations between USA and Chinese officials before Friday, business sources in Washington and Beijing said.

United States President Donald Trump on Thursday said that the first wave of tariffs of Dollars 34 billion in goods would be swiftly followed by another penalty on Chinese goods worth Dollars 16 billion.

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

China has said it would respond with tariffs on hundreds of US goods, including top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 US election, such as Texas and Iowa. US soybean farmers have been particularly concerned, and the price of soybeans has plunged 17 percent over the past month on tariff fears.

Trump argues that the deficit with China is a problem that has to get resolved now rather than later.

Trade disputes are nothing new for the two economic superpowers, and they are not confined to targeting each other.

This reflects a larger division in the White House: Trump and his closest aides are trying to bring about radical change, while those who support a more cautious approach find themselves sitting in silence. Others may not have voted for him but did not vote for Hillary Clinton, opting to write in third-party candidates or leave that part of the ballot blank. "No one will emerge as a victor from trade war, it benefits no one". If China is cheap, they go to China. However, I think he's wrong for talking about the trade imbalance.

The tariffs would mark a significant escalation in the trade dispute between the world's two biggest economies. They would always go to the cheapest place.

A key part of China's new "great food strategy", as analyst Zhengyuan Bo described it, is to boost domestic production. -China Business Council in Beijing. "China trade war, and let's hope it's not Fort Sumter", the piece began.

That strategy can only last so long, though.

The bank estimates that every $US100b of imports affected by the tariffs represents about 0.5 percent of global trade and 0.1 percent of global GDP.