United States President Donald Trump's previously announced import tariffs on $16 billion worth of Chinese products have come into effect, just as China responds with tariffs on an equal amount of USA products.
US President Donald Trump initiated the trade spat in July in an effort to punish China for what he says were unfair trade practices, such as stealing intellectual property.
Meanwhile, a Reuters poll of more than 100 economists shows that a lot of them expect economic growth to slow over the next two quarters as the boost created by last year's tax cuts fades and Americans begin to feel the costs of the tariffs. China has threatened that if the USA goes ahead with the next round of tariffs, it will respond with tariffs on US$60 billion worth of USA goods, which will be the first disproportionate response in the exchange. "However, Washington remains nebulous in this regard, given that the USA authorities such as the White House, the Treasury Department and the Office of the United States Trade Representative have been at cross purposes regarding their priorities with China", it said.
The Chinese state-run tabloid Global Times said in an editorial late Wednesday that the Chinese delegation shouldn't feel too much pressure over the outcome of talks.
And as China has vowed to retaliate further, Trump has threatened to target all $500 billion in goods the U.S. imports.
They have assumed a direct impact on China's economic growth in 2018 of 0.1 to 0.3 percentage points, and somewhat less for the United States, but the impact will be bigger next year, along with collateral damage for other countries and companies tied into China's global supply chains. While Treasury Secretary Steven Mnuchin is eager to find a negotiated solution, other cabinet members such as U.S. Trade Representative Robert Lighthizer are keen to continue increasing the pressure on Beijing, analysts say.
U.S. president Donald Trump has threatened to target all $500bn of Chinese imports unless Beijing agrees to sweeping changes to its intellectual property practices over what his administration alleges are unfair trade practices.
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China so far has retaliated dollar-for-dollar, hitting agricultural goods and autos in July, with new taxes on USA oil and more vehicles to come Thursday. "We haven't seen that yet, but we are going to continue to encourage them to address problems that we have raised".
The Trump administration says the aggressive stance is meant to pressure Beijing to change policies that allow and encourage the theft of United States technology and unfairly undercut American producers. However, US President Donald Trump said he wasn't expecting much from this week's negotiations.
The Commerce Ministry also declared that it plans to file a complaint with the World Trade Organization "in order to defend free trade and the multilateral system, and defend its legitimate rights and interests".
Though it is too early for trade damage to show up in much economic data as yet, tariffs are beginning to increase costs for consumers and businesses on both sides of the Pacific, forcing companies to adjust their supply chains and pricing, with some US firms looking to decrease their reliance on China.
China, meanwhile, has said it has its own list of tariffs covering $16 billion of U.S. imports, which will also come into effect on Thursday. The list of USA products this time includes oil products and coal for the first time, S&P Global Platts reports.