If US wants a trade war, China is ready to fight

Apr 05, 2018, 01:23
If US wants a trade war, China is ready to fight

The moves triggered further heavy selling in global stock markets and commodities, with USA stock futures sliding 1.5%, soybean futures plunging 3.7% and the dollar and China's yuan both hit. In response, China on Sunday slapped tariffs on $3 billion on agricultural products from the USA including hog parts, wine, fruit and nuts.

Investors fear a Pyrrhic battle that harms both economies, the two largest in the world. "So, it's hardly a life-threatening activity", Mr. Ross said.

Cotton represents another significant flow of trade from the USA: exports of fiber in its raw form fetched $5.8 billion previous year, government data show. "Many investors are waiting for the final market "puke" and, until then, it's fast money selling roller-coaster tickets".

Trump responded in a tweet, saying, "We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.".

The dollar fell and global stock markets edged higher on Wednesday after China retaliated in a trade dispute with the United States, but Wall Street rebounded from a steeply lower opening on the notion a tariff war has not begun and any impact is too early to foresee.

Grain traders Archer Daniels Midland Co ADM.N and Bunge Ltd BG.N , which trade US soybeans in China, were both off as much as 1.5 percent.

But while announcing the pending penalties, Chinese officials also played down any sense of a trade war and said they are ready to talk. Whilst many in the U.S. and the rest of the world have accused China of currency manipulation and unfair trading practices, the reality is that they want access to Chinese markets for high value goods.

William Zarit told The Associated Press in an interview Wednesday that proposed tit-for-tat tariff hikes by both sides would first hit global stock markets.

While critics have complained the administration's policies risk starting a trade war, Trump argued in a post on Twitter that the war had already been lost.

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Instead they should work toward a "serious negotiation".

Following are some of the possible winners and losers among US companies and sectors.

China fired back on Monday, hammering about $3 billion in US food supplies with increased tariffs. Large technology companies also struggled.

Wang said the plan, which sets specific targets for domestic brands' share of some markets, should be seen as a guide rather than mandatory.

A Chinese foreign ministry spokesman has urged the U.S.to come to the table and discuss an escalating trade dispute.

"The best opportunities for resolving the issues through dialogue and negotiations have been repeatedly missed by the USA side", Mr Shuang said.

China is the largest market for U.S. soy and the threat of tariffs on exports of the commodity has the potential to whip up trade anxieties in stalwart Republican areas.

The recent announcement of new tariffs on Chinese imports led to market uncertainties due to fear of a trade war. China is the biggest buyer of USA soybeans, picking up about a third of the entire US crop.

However Adams said that there was good news for food producers, as the Chinese government proposed duties on imported beef, but not pork or chicken.

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In commodities trading, crude oil futures are tumbling $1.01 to $62.50 a barrel after climbing $0.50 to $63.51 a barrel on Tuesday.

The U.S says China treats American companies unfairly by restricting access to its markets and stealing proprietary technology. "That's our hope", said Secretary of Agriculture Sonny Perdue.

U.S. President Donald Trump is instigating a range of tariffs on Chinese goods aimed at penalizing China for alleged theft of intellectual property.

"This shows that China's manufacturing development still mostly relies on boosting its scale rather than improving quality or innovation", Zhou said.

The tariffs represent the USA response to China's theft of U.S. intellectual property, including software, patents and commerce technology.

Wang said Beijing was willing to resolve these disputes with the US through dialogue on the basis of "mutual respect and mutual benefit". "If they slow for "the wrong reasons" like trade protectionism, that is much more worrying", said Deutsche Bank global strategist Alan Ruskin.

That followed the release of a USA government list of Chinese goods targeted for punitive tariffs in response to complaints Beijing pressures foreign companies to hand over technology.

Economists had previously warned the Trump administration's move to penalise China with the tariffs could prompt Beijing to retaliate and lead to higher prices for U.S. consumers.

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