The dollar is sliding as US-China trade war materializes

The dollar is sliding as US-China trade war materializes

China has said it will not "fire the first shot" in a trade war with the United States, but its customs agency made clear on Thursday that Chinese tariffs on American goods would take effect immediately after US duties on Chinese goods are put in place.

The Customs and Border Protection's website confirmed on Thursday that the new tariffs on Chinese goods will take effect Friday at 12:01 a.m.

Gao said China's foreign trade was expected to continue on a stable path in the second half of the year, though investors fear a full-blown Sino-American trade war would deal a blow to Chinese exports and its economy.

Two of the largest economies in the world have descended into a trade war, after China followed up on its threat to retaliate against the $34bn (£25.7bn) U.S. tariffs. America is the world's largest exporter of soy beans, and China is the world's largest consumer of them.

Under a full-blown trade war in which the United States slaps 10 per cent tariffs on all other countries and they respond, the economists reckon USA growth would slow by 0.8 percentage point by 2020.

Many businesses count China as a major export destination, but the retaliatory tariffs placed by the Chinese government on United States products will similarly increase prices in China and hurt sales.

Trump has threatened to progressively ratchet up USA penalties to a total of $450 billion in goods - which would represent the lion´s share of all of China´s exports to the United States.

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

Iconic American motorcycle brand Harley Davidson has announced plans to move production overseas to evade the retaliatory tariffs from the European Union, drawing a barrage of attacks on Twitter from Trump. The newspaper quoted observers as saying there was "anecdotal evidence" of a build-up in sanctions against USA businesses.

U.S. Chamber of Commerce estimated impacts.

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It is now the "largest trade war in economic history".

Besides going to the WTO, China also said it would work with other countries to promote free trade, as Trump engages in battles with historical trading partners around the world. "Farmers want trade, they don't want aid". "And it's making American companies less competitive", Gonzalez said.

The White House said it would consult on tariffs on the other $US16b of products, and would apply these later. "And the impact on USA business, in my estimation, will be substantial".

Starting Friday, the US will tax only 818 of the proposed Chinese products, which are worth about $34 billion a year. He feels he can take a very strong line against Trump.

The Asian nation slapped levies on an equal amount of American goods, including heartland staples like soybeans, corn, pork and poultry - a move President Donald Trump said would compel him to hit China with another round of duties on up to $500 billion in products.

That would bring the total of targeted Chinese goods to potentially $550 billion - more than the $506 billion in goods that China shipped to the United States a year ago.

'There are no winners in a trade war, ' said the chamber's chairman, William Zarit, in a statement.

After months of speculation as to whether or not it would occur, the trade war between the United States and China is now underway in earnest.

"Although uncertainties have clearly increased this year and pose downside risks to growth, the latest batch of timely activity indicators suggests that in the shorter term the global economy is resilient to these worries", Ben May, director of global macro research at Oxford Economics in London, said in a report on Thursday. These tactics include cyber-theft and requiring American companies to hand over technology in exchange for access to China's market.

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