What a trade war could mean for MI

Soybean plants grow in a field near Tiskilwa Illinois

Hu gave no details, but the Communist Party newspaper People's Daily said the customs agency was carrying out a plan announced last month to impose 25 percent tariffs on a $34 billion list of American goods including soybeans, pork and electric cars. "China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system".

In Beijing, policy makers are digging in for what could be a protracted fight - one in which they say they won't be the aggressor.

With that now looking likely there are fears the world faces a wide scale trade war - with the U.S. also targeting Europe and Canada. Another $16 billion are scheduled to take effect in the next two weeks. According to tariff supporters, this can help to save jobs that might otherwise go overseas.

Gao also said United States business interests would suffer from the first set of tariffs, with about US$20 billion of the targeted goods, or 59 per cent, produced by foreign firms, including USA ones.

Russian Federation is introducing extra duties on a range of products imported from the U.S. that can be replaced by locally made equivalents.

"There are no winners in a trade war", William Zarit, chairman of the American Chamber of Commerce in China, said in a statement published just moments before the 12:01 a.m. Washington-time deadline.

The US tariffs imposed so far would affect the equivalent of 0.6% of global trade and account for 0.1% of global GDP, according to Morgan Stanley.

I view these tariffs as a negotiating ploy by President Trump to try to force the Chinese to open up their market better for American companies. It's the first time the USA has imposed tariffs aimed just at Chinese goods and follows months of accusations that Beijing stole American intellectual property and unfairly swelled America's trade deficit.

President Donald Trump's administration's 25 per cent tariffs are targeting Chinese products such as industrial machinery, medical devices and auto parts.

First "34 (billion dollars), and then you have another 16 in two weeks and then as you know we have $200 billion in abeyance and then after the $200 billion we have $300 billion in abeyance. Ok?"

Together, the two rounds - $34 billion and $16 billion - would comprise the $50 billion in tariffs that Trump announced in May, citing China's alleged theft of intellectual property, forced technology transfer and other industrial policies that favor China's domestic businesses and hurt US firms.

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Longer term though a trade war posed a risk to the recovery of the whole global economy, he said. "There are lots of things they could do to make life hard for USA businesses operating in China that would be detrimental to us".

And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won't achieve what the Trump administration is trying to accomplish, said Hsu.

The two giant economies appear ready to see which side can endure the most pain.

Even before the first shots were fired, the prospect of a trade war was worrying investors.

Adding to the tensions, a Chinese court this week temporarily barred Micron Technology Inc (MU.O) from selling its main semiconductor products in the world's biggest memory chip market, citing violation of patents held by Taiwan's United Microelectronics Corp (UMC) (2303.TW).

But China is not the only country to find itself in Washington's crosshairs lately when it comes to trade.

China's soymeal futures fell more than 2 percent on Friday afternoon before recovering most of those losses, amid market uncertainty over whether China had implemented tariffs on a list of USA goods, including soybeans.

In May, the figure swelled to US$24.6 billion, which was nearly all of China's total surplus of $24.9 billion, compared to the same period previous year.

Will there be a full-scale trade war?

"[The US has started the] largest trade war in economic history".

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