The United States Government have been accused of initiating a trade war by China, whose commerce ministry threatened to fight back firmly with “qualitative” and “quantitative” measures if the U.S. publishes an additional list of tariffs on Chinese goods.
Recall that on Monday, U.S. President Donald Trump threatened to impose a 10 per cent tariff on $200 billion of Chinese goods, saying the move was in retaliation for China’s decision to raise tariffs on 50 billion dollars in U.S. goods. These include agricultural products, cars and marine products with a similar tax.
“Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions, and is a disappointment for the international community,” according to a statement by the ministry on Tuesday.
“The U.S. has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the U.S., but of the world,” the ministry said.
The U.S. tariffs already announced affect more than 800 Chinese products worth 34 billion dollars in annual trade and they are due to come into effect on July 6. The product lines range from aircraft tyres to turbines and commercial dishwashers.
The United States Government also asked China to stop practices, that allegedly encourage the transfer of intellectual property – design and product ideas – to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market.
On the other hand, it was gathered that China’s stock market suffered a late rout, as investors in Shanghai shivered at the prospect of fresh US tariffs. The benchmark Shanghai composite sank by 3.8% percent to close below the 3,000 mark at 2,906.43. That’s its lowest level since late June 2016.
Reuters reports that speculators were badly hit by the selloff:
The slump risks triggering fresh margin calls in a highly-leveraged stock market, potentially causing a downward spiral that could derail Beijing’s plan to lure the listings of high-tech giants.
“The market is so fragile. You don’t know where the bottom is,” said David Dai, general manager of Shanghai Wisdom Investment Co Ltd. “It’s more rewarding watching the World Cup.”