Stock Markets Tumble as Trump Makes Good on China Tariff Threat

Although making it clear that it feels prepared to meet further protectionism with retaliation, the Commerce Ministry also urged the United States to avoid taking bilateral trade relations to “dangerous place”, hoping that it will pull the current situation back “from the brink”.

U.S. President Donald Trump signs a memorandum on intellectual property tariffs on high-tech goods from China, at the White House in Washington, U.S. March 22, 2018. That the president would reach for the blunt instrument of tariffs against China is no surprise; it’s certainly easier and more satisfying, emotionally, than tackling homegrown factors in the US trade deficit, such as the structural budget deficits his tax cuts will worsen. China can also make like hard for US companies, including blocking the likes of Boeing Co. and Cisco Systems Inc. from accessing a procurement market it says is worth 3.1 trillion yuan ($490 billion).

The Ministry of Commerce announced additional duties on up to $3 billion of imports from the United States, including fruit, nuts, pork, wine and seamless steel pipe.

The measures suspending tariff concessions will target 128 USA products including pork, wines and seamless steel tubes, the Ministry of Commerce said in a statement.

It also would take a lot more than tariffs on $60 billion worth of exports from China to inflict significant pain on the government, Scissors said. Trump says Beijing has forced US firms to transfer their intellectual property to China as a cost of doing business there.

The move prompted the biggest percentage plunges in Wall Street’s three major stock indexes in six weeks as investors were agitated by the scale of USA tariffs and possible impact on global trade.

Other issues that the statute addresses include intellectual property theft, which China engages in. “The president has said we are not afraid of getting into a trade war, given the size of our market, the size of our economy, and the fact that we have a big trade deficit”.

Washington is also pressing China to reduce its staggering $375 billion trade surplus with the United States by $100 billion. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on US pork and recycled aluminium goods, according to the statement.

“It has benefited China more than us”, the official said, hoping that the Chinese response to these measures could account for that fact.

US stocks tumbled even prior to Trump’s announcement of the tariffs plan which spurred fear of an escalating trade war. “We urge the administration and China to quickly resolve the trade dispute so that our apple exports wont be disrupted”, Bair said.

“No one will emerge a victor from a trade war”, he told a press conference held outside the parliamentary session. -China trade war ranked as the most-read topic on Friday.

Such shares defied a global market rout caused by the escalating tensions and which dragged Shanghai’s main index 3.39 percent lower at the close, while Shenzhen’s index fell 4.49 percent.

Earlier this month, Trump signed a proclamation calling for tariffs on steel and aluminium, a decision which the American Chemistry Council (ACC) said put $133bn of chemical industry investment at risk.