‘US shooting itself in the foot with economic blackmail against China’ - Beijing

Donald Trump

President Donald Trump has confirmed he will pull the trigger on a trade war with China at 12:01 am in Washington - 4pm New Zealand time - with tariffs on US$34 billion of goods.

The influential US Chamber of Commerce, with headquarters just steps from the White House, urged Trump this week to reconsider his actions, saying the counter-tariffs now affected $75 billion in American exports and endangered US jobs. On April 3, the USA released a list of targets for proposed tariffs on $50 billion worth of Chinese imports, taking aim at high-tech and industrial goods.

"The United States will be opening fire on the whole world and also opening fire on itself", said China's Commerce Ministry spokesperson on Thursday, reiterating that Beijing will fight back.

Chinese Commerce Ministry spokesman Gao Feng said that the proposed US tariffs would hit many American and foreign companies operating in China and disrupt their supplies of components and assembly work. Editorials in the state-controlled media speak of the folly of the Trump administration's attempt to extract concessions via higher tariffs, warning that will hurt US economic interests while strengthening China's domestic industries.

"US measures are essentially attacking global supply and value chains. To put it simply, the USA is opening fire on the entire world, including itself", he said.

"China is engaged in industrial policies and theft of intellectual property that merits a response, but across the business community we feel that tariffs are not the answer", John Murphy, senior vice president for global policy at the U.S. Chamber of Commerce, told CNBC on Tuesday.

"We will continue to assess the potential impact of the US-initiated trade war on companies and will help companies mitigate possible shocks", Gao said.

"There are those who believe the US must lose and China must win", Li Xiao, a leading economics professor, said in a commencement speech last weekend at northern China's Jilin University.

In an attempt to persuade the Trump administration to step back, Beijing officials said yesterday that $20 billion of Chinese products set to be targeted by the United States are made by foreign companies.

But officials in Beijing say China is prepared to do what's needed to safeguard its national interests.

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.

One study said as many as 400,000 jobs could be lost. On April 4, China fired back. China's imports from the United States past year totalled $153.9 billion, well short of Trump's $450 billion target.

In the latest sign that the risk of penalties is hitting trade, a vessel carrying US coal heading for China switched its destination to Singapore.

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Some prominent Chinese experts say Beijing may have miscalculated the pain the USA tariffs could inflict on export manufacturers' already razor-thin margins, and overplayed its hand.

Ford said it encouraged Washington and Beijing to resolve their issues over trade and that it would "continue to monitor the situation as it evolves".

The WTO on Wednesday warned that trade barriers being erected by major economies could jeopardize a global economic recovery, with their effects already starting to show.

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). USA firms in China are already reporting spikes in random inspections at ports.

While the company could avoid the tariffs by relocating its manufacturing facilities outside China, doing so would take years, Hoef says.

China's central bank moved to calm jittery markets on Tuesday after the yuan hit its lowest level in nearly a year.

"And they're going to simply pass that cost on to their customers, which in many cases is the US consumer", Hoef says.

This set off furious negotiations, which eventually resulted in a tentative trade agreement between the Trump administration and Chinese officials.

Mercedes-maker Daimler, BMW, Porsche and Volkswagen raced up as much as 5 percent after reports of a US offer to suspend tariff threats on European Union -made cars if the bloc lifts its duties on USA ones.

The Trump administration has argued that China has deployed predatory tactics in a push to overtake USA technological dominance.

A senior Western diplomat told Reuters that there was no sign of any talks at the moment between the two countries, even via back channels.

The move is part of Mr Trump's protectionist agenda, which has undermined the free trade policies that have shaped the global exchange of goods in recent decades.

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