China says it is 'shocked' by United States actions in trade dispute

Lester Mason
July 12, 2018

The United States began imposing tariffs on US$34 billion in Chinese goods at 12:01 a.m. (0401 GMT) on Friday.

U.S. officials released a list of 6,031 Chinese product lines the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. That raises the risk China could retaliate in other ways, such as placing restrictions on us companies doing business in the country. "There is no justification for such action", he said in a statement.

The move would be the latest in the escalating trade skirmish between the world's two biggest economies.

The S&P 500 dropped 0.7 percent as energy, materials and industrials all fell more than one percent. Traders said they were keeping an eye on the key 6.7 per dollar level as pressure mounted on the currency.

President Donald Trump has threatened to tax as much as $550 billion in Chinese products - an amount that exceeds America's total imports from China a year ago.

A Commerce Ministry statement said, "It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating".

Administration officials said a two-month process would allow the public to comment on the proposed tariffs before the list is finalized.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, responded to Lighthizer's announcement with dismay. "The US upped the stakes in the trade war with China, sending equity markets tumbling, as risk off prevails", Jasper Lawler, head of research at London Capital Group wrote in an email.

The Chinese Commerce Ministry said Tuesday that it would be forced to retaliate against what it called "totally unacceptable" US tariffs.

"American families are the ones being punished".


The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years.

"This is an appropriate response under the authority of Section 301 to obtain the elimination of China's harmful industrial policies", Lighthizer added.

Several traders said they saw some dollar selling by large state banks in the spot market, which went some way to supporting the yuan, though they did not know whether USA dollar liquidity offered by the banks was on behalf of the central bank or corporate clients.

The foreign ministry described Washington's threats as "typical bullying" and said China needed to counter-attack to protect its interests.

"I say, 'No, no, we have all the cards", the president said at a rally in Montana, expressing disbelief at the exchange.

Morgan Stanley told clients in a research note on Wednesday that the trade conflict is "creating earnings noise and eroding gains from fiscal stimulus, which we think was already in the price".

U.S. policy "actually interferes with the process of economic globalization" and "damages the world economic order", charged Li.

It also said that China would have to respond to the United States actions.

"China has no option but to fight fire with fire".

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER