China moves to spur consumption amid trade war headwinds

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"The United States has waged the biggest trade war in economic history against the rules of the World Trade Organization", China's Commerce Ministry said in a statement, describing the USA tariffs as "textbook trade hegemony".

Trump has enraged such US allies as the European Union, Canada and Mexico by hitting them - and just about everyone else - with a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum.

In a research note, Wells Fargo wrote the current level of tariffs is unlikely to have a material impact on the country's economy, but the prospect of a serious trade war is growing.

"Consumers will not only be helpless, but will also harm the interests of American businesses and people", the statement said.

Both the United States and China imposed punitive tariffs on each other's exports today in what Beijing calls "the biggest trade war in economic history".

Months of dialogue between the two economic superpowers appeared to have failed, with Trump warning just hours before the tariffs came into effect that Washington was ready to impose duties on hundreds of billions more in Chinese imports.

The Trump administration initiated the dispute in April, announcing the tariffs and accusing China of using "unfair" tactics to build a large trade surplus with the US and expropriating American technology.

The president's tariffs, the PIIE's researchers conclude, are "a prime example of 20th century tools aimed at the knowledge-embodying trade flows of the 21st century".

The price of USA soybeans has plunged 17 percent over the past month on fears that Chinese tariffs will cut off American farmers from a market that buys about 60 percent of their soybean exports.

John Heisdorffer, a soybean grower from Iowa and president of the American Soybean Association, said the group had appealed to the Trump administration to find other solutions to addressing trade issues with China.

"President Trump has really left no exit ramps here", Gold told CNBC, adding, "We're in a downward spiral".

And Beijing's tactics may go beyond tariffs to include arbitrary quarantines and a costly uptick in customs inspections.

Another poster said USA sellers would face higher costs if they sell Chinese-made goods, since they'd have to pay more when importing them.

Economists have warned that the escalating trade frictions could throttle global growth.

"I think it's true to say that a lot of the pessimism has already been factored in over the past couple of weeks, with share prices gradually going down as the realisation has set in that apart from being a war of words, this does now seem to be a trade war", he added.

While China has signalled a willingness to buy more American goods to balance out the deficit, it has refused to trade away what it views as an essential part of its economic future.

"A little fighting may be the only way the Trump administration clears its mind and allows everyone to sober up", the state-run Global Times said.

The lists of goods to be hit by tariffs have been updated several times by both administrations.

China central banker Ma Jun said the first punches will have only a "limited impact" on the nation's economy, trimming GDP growth by 0.2 percentage points.

A full-fledged trade war, economists at Bank of America Merrill Lynch and elsewhere warn, risks tipping the USA economy into recession. -China trade involves parts and supplies, rather than final goods - so the most immediate effect will be felt by the companies making the products, not the consumers finding them on store shelves.

"There should be no doubting Beijing's resolve", the China Daily said.

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