China implemented retaliatory tariffs on USA goods just after noon on Friday, immediately after the US began collecting additional tariffs on Chinese imports, the official Xinhua News Agency reported, citing an unnamed spokesperson from China's General Administration of Customs. Analysts say the added expense of China's 25 percent tariff on US soybeans will effectively block the product from entering the Chinese market.
USA officials accuse China of building its emerging industrial dominance by stealing the "crown jewels" of American technological know-how through cyber-theft, forced transfers of intellectual property and state-sponsored corporate acquisitions.
In trade disputes between Japan and the United States during the 1980s and 1990s, Tokyo was targeted by the same so-called Section 301 investigation that Washington is now using against China to determine what it says are forced technology transfers to Beijing that burden or restrict USA commerce.
The U.S. additional tariffs of 25 percent on US$34 billion worth of Chinese imports took effect Friday. Soybeans are among the American goods targeted by Chinese tariffs after the USA implemented duties earlier in the day and President Donald J. Trump threatened more action.
Though worldwide demand for USA soybeans is unlikely to decline in the near future, said Hurst, a trade war may push China and other soybean-producing countries, such as Brazil, to invest more heavily in soybean production. "The countdown is on as to what Trump will do next".
The US runs a bilateral trade deficit of $336bn with China and imports much more from it than the reverse, giving it an early advantage.
"The $50-billion trade war will slow down China's GDP growth by 0.2 percentage points", Ma told Xinhua, China's official news agency.
Jaime Castaneda, senior vice president of the US Dairy Export Council, said the retaliatory tariffs have been a "one-two punch" that have left the industry "reeling". Now, he's anxious that the trade dispute between the USA and China could hurt his and other producers' bottom line.
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Even though neither Lu nor the Chinese Commerce ministry gave details about the scales of tariffs, Beijing has plans to slap punishing levies 545 USA products worth $34 billion a year that range from soybeans and lobsters to sport utility vehicles and whiskey.
The minutes of the U.S. Federal Reserve June policy meeting show that economic uncertainty due to the trade war is already affecting private investment in the U.S., with many investors deciding to scale back or delay their investment plans. China said it will immediately put on his own similarly sized tariffs on an unspecified clutch of American goods.
"Premiums reflect the rising possibility of China being more dependent on Brazil's soybeans", Luis Fernando Roque, an analyst at consultancy firm Safras & Mercado, said in a telephone interview from Porto Alegre.
"Clearly the first salvos have been exchanged and in that sense, the trade war has started", said Louis Kuijs, chief Asia economist at Oxford Economics.
But China also believes that its economy, with a greater focus on domestic demand and a reduced dependence on exports, can ride out the storm.
Beijing hit back on Friday with tariffs worth $34bn and has said it will match Trump's $50bn threat.
China accused the United States of launching the "largest trade war in economic history", saying it was "typical trade bullying" that could trigger "global market turmoil". The move prompted China to retaliate the same way.