Trump is trying to turn global trade into 'The Apprentice'

Trump is trying to turn global trade into 'The Apprentice'

Trump is trying to turn global trade into 'The Apprentice'

The Dow Jones Industrial Average plunged more than 700 points, while Tokyo closed 4.5 percent lower, Hong Kong fell 2.45 percent and Shanghai sank more than three percent.

"China doesn't hope to be in a trade war, but is not afraid of engaging in one", the Chinese commerce ministry said in a statement on Friday.

Saying it would be the "first of many" trade actions, Trump said the measure was aimed at punishing Beijing over the alleged theft of USA technology and Chinese pressure on American companies to hand it over.

Trump has repeatedly accused Beijing of unfair trade practices like currency manipulation - which helps China make its exports more affordable - and of stealing USA intellectual property. A 25 percent tariff on pork and aluminum imports is also being considered.

The administration's calculation seems to be that China will back down on intellectual property theft if faced with less access to US markets. However, officials have promised to continue to open Chinese markets to foreign companies.

Policy makers across the world are warning of a brewing trade war that could undermine the broadest global recovery in years.

After Trump's decision on Thursday, a livid China announced 15-per cent tariff on products including fruits, nuts, wines and seamless steel tubes and a 25-per cent tariff on pork and recycled aluminum products.

According to estimates by the Information Technology and Innovation Foundation (ITIF), a USA technology policy think tank, a 25-percent tariff on Chinese information and communications technology (ICT) imports would cost the US economy 332 billion dollars over the next 10 years.

While China is the world's largest steel producer, it accounts for less than one percent of USA imports and sells only 10 percent of its wrought aluminium overseas.

The week's carnage, however, was dominated by the fight over trade involving the two biggest economies in the world: the USA and China.

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"China does not want a trade war with anyone".

The last 24 hours have seen a significant ratcheting up in trade tensions between the United States and China.

US Vice President Mike Pence hailed the new measures, saying they made it clear "the era of economic surrender is over".

"The upshot is that today's (U.S.) tariffs amount to no more than a slap on the wrist for China", Mark Williams, Chief Asia Economist at Capital Economics, wrote in a note.

Lighthizer indicated the industries could include aerospace, maritime and rail transport equipment, and new energy vehicles.

Yevtukhov said Russian Federation was also considering direct retaliatory measures against the USA tariffs, such as imposing reciprocal tariffs on US goods.

In fact, China said Friday that it is considering tariff increase on imports of some products from the United States to make up for losses caused by the US tariffs on steel and aluminum imports from China.

The senior U.S. official said Washington was "very optimistic" that allies such as Europe, Japan and Australia would join its WTO case. "It is time for China to take remedial action and show that it is a true partner in global trade". China announced a more modest package of potential tariffs of its own and vowed to "fight to the end" to defend its interests if a trade war breaks out.

Gareth Stace, a director with the trade association UK Steel, said the temporary exemption from tariffs would be "greeted with an enormous sigh of relief" by the UK's steel sector. Meanwhile, business groups representing companies ranging from Walmart Inc. are warning USA tariffs could raise prices for consumers and sideswipe stock prices. Last year, the United States imported $506 billion in goods from China.

China "urges the US side to resolve the concerns of the Chinese side as soon as possible" through dialogue and "avoid damage to the overall situation of Sino-US cooperation", it said.

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