US, China firms brace for escalating trade war

US, China firms brace for escalating trade war

The U.S. will implement a tariff on $50 billion in goods from China, the White House announced Friday, setting up a back-and-forth with the country that quickly retaliated with a tariff on products from the U.S.

Speaking alongside U.S. Secretary of State Mike Pompeo in Beijing, Chinese State Councillor Wang Yi said there were two choices when it came to trade.

China's in-kind response to U.S. President Donald Trump's announcement of tariffs on $50 billion of imports from the nation left the global economy on the verge of a trade war.

Stocks closed in the red on Friday as the Trump administration moved to impose tariffs on China, Beijing fired back with and a looming OPEC meeting weighed on the energy sector. The ministry did not detail specifically what goods China will penalize.

Tariffs on $34 billion of USA goods including agricultural products, autos and aquatic goods will take effect from July 6, Xinhua reported early on Saturday, citing the commission. Shortly after Beijing's warning, the White House threatened tariffs on a further $100 billion of Chinese exports. It said Beijing also was scrapping agreements to narrow its multibillion-dollar trade surplus with the United States by purchasing more American farm goods, natural gas and other products.

The Semiconductor Industry Association, which represents major American chipmakers including Intel (INTC) and Qualcomm (QCOM), said it was alarmed to find the United States government was now considering tariffs on computer chips imported from China.

"Manufacturers certainly have concerns that tariffs will cause more problems than they solve, but we also recognize that the administration may intend to use them as a negotiating tactic to bring China to the table and achieve larger goals", Timmons said.

China has said that it will retaliate with $50 billion in tariffs in response, rattling financial markets. The second package will target the remaining $16 billion of Chinese goods, on 284 product lines.

North Korea: Trump agreed to 'step-by-step' approach to denuclearization
CBS News' David Martin reports that Pentagon spokesperson Dana White said Defense Secretary James Mattis "was not surprised". Chung Lee, who is owner of Kim's Korean Restaurant in Spokane, moved to the US from South Korea more than 35 years ago.

China's retaliatory tariffs will follow a similar schedule.

Some companies that source materials from China could eventually look for suppliers in other Asian countries with low labor costs including Vietnam, the Philippines and Bangladesh, but many will take a wait-and-see approach because it takes times to rewire supply chains, said Erik Lundh, an economist specializing in China for The Conference Board, a major business group.

ZTE last week agreed to pay a $1 billion fine to the US government to end a crippling supplier ban imposed after it broke an agreement to discipline executives who conspired to evade USA sanctions on Iran and North Korea.

Currently, China and the United States have the world's biggest trading relationship.

America's trade in goods with China topped $635 billion in 2017, according to the U.S. Census Bureau.

The USTR official said the tariffs were aimed at changing China's behavior on its technology transfer policies and massive subsidies to develop high-tech industries.

Meanwhile, Chinese companies use government money to buy US businesses. "If there was ever a time for the USA seafood industry, restaurants and retailers to come together to work towards a common goal of market access and supporting good American jobs and healthy sustainable American seafood, it is right now".

Trump has blamed the trade imbalance between the two countries for the loss of American jobs.

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