China warns USA to stop wrong trade actions or face consequences

Sunday, 25 Aug, 2019

At a symposium of central bankers in Jackson Hole, Wyoming, on Friday Powell warned that trade tensions were hitting the global economy.

The retaliatory move comes as President Trump has vowed to impose 10 percent penalties on an additional $300 billion in Chinese goods - a move that would cover almost all of China's exports to the USA - beginning September 1. Trump has fired more shots in the trade war as he seeks a sweeping trade deal with Beijing - even as the tariffs threaten global economic growth. He said that he is taking on China over its unfair trade tactics and intellectual property (IP) theft which have been "ripping off" the United States for decades, but that the reporting that followed had cast him in an unfair light.

Duties on $250 billion of imports already in effect will rise to 30% from 25% on October 1, Trump said in a series of tweets Friday after US markets closed. In addition, planned tariffs on $300bn of other Chinese goods would now be 15% instead of 10%.

While Beijing worked for three weeks on its multi-tiered tariff response, Trump's promised retaliation - which came in a signature tweetstorm - was announced in less than 10 hours.

"While monetary policy is a powerful tool that works to support consumer spending, business investment and public confidence, it can not provide a settled rule book for global trade", Powell said. "Where does this end?"

The announcement comes as leaders of the Group of 7 major economies prepare to meet in France this weekend. "China trade war via negative headlines and financial market reaction to said trade war". The Dow Jones lost 623 points and finished at 25,629 - a 2.37 percent loss.

'Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing. your companies HOME and making your products in the United States of America, ' wrote Trump.

"If the US imposes tariffs on France, the European Union will respond in kind".

It was unclear under what authority Trump could demand that private companies alter their production. Our presence in China allows us to reach Chinese customers and develop overseas markets.

Mr Trump already has imposed 25 per cent tariffs on $US250 billion of Chinese products.

Fitch Ratings has estimated that extending tariffs to cover another US$300 billion in Chinese goods would chop 0.4 per cent from world economic output.

The country's Commerce Ministry said it would impose additional tariffs on a total of 5,078 American products including agricultural products, crude oil and small aircraft. "He understands that and until such time, as there is a deal, we will be taxing the hell out of China".

Powell offered little by way of concrete assurance, saying the Fed would "act as appropriate to sustain the expansion" - a phrase he returns to frequently - and cautioned that there are "no recent precedents" to guide policy response to the trade war.

Using it could risk unintended harm to the U.S. economy, said Mr Peter Harrell, a former senior State Department official responsible for sanctions, now at the Centre for a New American Security.

"China doesn't want to fight this trade war", the post said.

The White House did not respond Saturday to a request for comment on the Chinese statement, which also urged the United States "to not misjudge the situation, to not underestimate the determination of the Chinese people, and to immediately stop its wrongdoings".