China: 'We're Ready to Retaliate Against US Tariffs'

Washington and Beijing are making global headlines with threats over the prospect of a trade war, but they're also hurling indirect criticisms at each other on a more subtle front: Official travel warnings cautioning their respective citizens about the dangers associated with traveling from China to the US - or vice-versa.

In commodities, Brent oil futures were on the rise again at $78.30 a barrel, a day after U.S. President Donald Trump sent a tweet demanding that OPEC reduce prices for crude. Later in the day, traders will get the minutes from last month's Federal Reserve meeting when it raised USA rates for a second time this year.

"The US is firing shots to the world, including to itself", spokesman Gao Feng said Thursday during a press conference.

China is expected to retaliate with tariffs on $34 billion of U.S. goods, including soya beans. The main Chinese stock market index has tumbled 12 per cent over the past month.

Adding to the tensions, a Chinese court this week temporarily barred Micron Technology Inc 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).

An outright trade war with the United States could hit China's export machine, with recent data pointing to fatigue as credit expansion slowed and domestic demand looked to be softening.

Forecasters say a full-blown conflict could knock up to 0.5 per cent off global economic growth through 2020 if Washington and Beijing impose tariff hikes on $250 billion of each other's goods.

The office of the US Trade Representative directed Customs and Border Protection to begin collecting duties on Chinese imports starting at midnight Friday.

China's commerce ministry said on Thursday that the United States is "opening fire on the entire world", warning that Washington's proposed tariffs on Chinese goods will hit worldwide supply chains.

Economists say that if the tariffs stop there, the impact on both economies will be small.

China has vowed to institute retaliatory tariffs on US goods in response to Trump's trade policy, raising concerns of a looming global trade war.

But economists also say the trade war comes as the period of synchronized expansion among the world´s largest economies, which is bolstering demand for USA goods and services, may be starting to run out of steam, raising the risks that tariffs could harm growth.

"A hit to China's exports would act as an additional drag on an economy that already shows signs of losing some growth momentum", said Eswar Prasad, a professor of trade policy at Cornell University. Those tariffs, including the set that will take effect on Friday, are aimed mostly at industrial goods and technology.

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

However, Guo Shuqing, head of China's banking and insurance regulator, said in a statement that the trade war would not affect China's own reforms and opening up, and that it was confident going forward. Per NPR, the Trump campaign ordered so many more flags than the Clinton campaign in 2016 that Chinese locals near the factory joked that they knew the outcome of the election before anyone.


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