Published: Sat, July 07, 2018
Markets | By Otis Pena

U.S. tariffs take effect, China warns of 'counterattack'

U.S. tariffs take effect, China warns of 'counterattack'

America is the world's largest exporter of soy beans, and China is the world's largest consumer of them.

Benchmark 10-year notes last rose 4/32 in price to yield 2.8254 percent, from 2.84 percent late on Thursday.

US auto manufacture giant General Motors (GM) is also eyeing a loss in the face of the trade wars Washington is waging. China has vowed to hit back in kind on goods ranging from American soybeans to pork, which may in turn prompt Trump to raise trade barriers even higher.

Under the banner of his "America First" policy, Trump has also targeted other traditional trade partners of the United States, such as the European Union, Japan, Mexico and even Canada. Meanwhile, Washington is attempting to renegotiate the 24-year-old North American Free Trade Agreement with Canada and Mexico. Trump has declared trade wars as "easy to win" and bet the skirmish will prompt American companies to return operations to the US.

Duties on Chinese goods started at 12:01 a.m. Friday in Washington, just after midday in China.

Notably, after Europe announced it would tax quintessentially American exports like orange juice, peanut butter and Harley-Davidson motorcycles, Harley-Davidson said it would move production of its Europe-bound bikes overseas to avoid the tariffs.

'There are no winners in a trade war, ' said the chamber's chairman, William Zarit, in a statement. Because products that are made in China - from Apple products to Nike ones - are going to get expensive, and be more expensive on the shelves of Walmart for everyday American consumers.

Chinese stocks were down by midday on Friday and the yuan was also off against the dollar as United States tariffs on Chinese goods kicked in. Asian equities wobbled but also managed to end up.

China lodged a case with the World Trade Organisation (WTO) against the United States, its commerce ministry said in a one-line statement late on Friday.

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"I hope it doesn't come to that, but it could", Heck said Friday during an interview with FOX Business' Dagen McDowell. He added that for now, "He's called the bluff of other countries that have basically been abusing. our workers for a long time". Trump has threatened to target an additional $200 billion worth of Chinese goods. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

"China is never the only side to suffer", Cheng said. "Manufacturers in the United States succeed when the rules are clear and fair and markets are open".

If the U.S. and China cool off after a first round of tariffs, the fallout will be modest, according to Bloomberg Economics.

Distillers are anxious that retaliatory tariffs, not only from China but Europe and Canada as well, could stunt their sales and slow expansion and hiring plans.

Gov. Rick Scott and other Florida officials have kept a fairly low profile as Trump pursues policies he says will even the playing field for US producers.

The US measures target 32 billion dollars of Chinese goods.

Another $16 billion are expected to go into effect in two weeks and potentially another $500 billion, Trump told reporters aboard Air Force One on his way to Montana before the tariffs kicked in.

A strong rise across autos boosted European shares on Thursday, as hopes over a softening in US trade rhetoric lifted the sector, though trading remained cautious ahead of a USA deadline to impose tariffs on Chinese goods.

"The Trump administration also believes that at least starting a trade war is in its interests; the USA economy is strong enough to endure a crimp in trade, the president's domestic political standing is as strong as ever amongst Republicans, and pushing China hard on trade may help restore U.S. credibility on other issues", he added.

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