Trade war could hurt these economies far more than US, China

The European Union Mexico and Canada have all the hit U.S. with billions in retaliatory tariffs

The European Union Mexico and Canada have all the hit U.S. with billions in retaliatory tariffs

On July 6, tariffs on Dollars 34 billion worth of imports will take effect, and Beijing has promised to retaliate in kind.

Speaking at a weekly news conference, Commerce Ministry spokesman Gao Feng warned the proposed US tariffs would hit worldwide supply chains, including foreign companies in the world's second-largest economy.

Economists have for months warned of the potential damage to the U.S. and global economies from aggressive trade policies that evolve into protectionism, which would raise prices and upend global supply chains.

"US measures are essentially attacking global supply and value chains. Simply put, the USA is opening fire on the whole world, and also firing at itself", Gao said.

The top commerce minister reiterated the stance that China "will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system".

The US-China trade war countdown has reached its final hours, with tariffs on US$34 billion in Chinese imports to the US set to go into effect at 12:01 am Friday. China has said it will not back down, although it has fewer USA imports to target. According to Bloomberg, President Trump will cut as much as half a percentage point from staggering growth levels of around 6.9 percent.

Trump has remained defiant, declaring that trade wars are "good and easy to win", and arguing that the tariffs are necessary for national security and to balance trade deficits.

Beijing will impose duties on almost 30 billion dollars of American products.

"China wants the European Union to stand with Beijing against Washington, to take sides", said one European diplomat.

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

On April 3, the United States released a list of targets for proposed tariffs on $50 billion worth of Chinese imports, taking aim at high-tech and industrial goods.

"If the United States decides to escalate these tensions, everyone is going to get caught up, and it's going to be pain across the board", said Nick Marro, Hong Kong-based analyst at The Economist Intelligence Unit.

Beijing denies it's in the wrong and says it's ready to fight a trade war until the end. 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.

Fears over the impact of the trade clash have rattled markets around the world, with China's stocks and currency coming under particular pressure in recent weeks.

Some U.S. companies are pulling back investments in equipment and jobs "as a result of uncertainty over trade policy", the Federal Reserve warned Thursday, adding that the U.S. clashes with trading partners were already huring the stock market and could also harm overall economic growth.

Customs services for the US and China will be responsible for collecting the new tariffs as imports pass through the port of entry.

Both Chinese and USA business sources in China said there appeared to be little hope that the tariffs could be averted.

Latest News