China says will 'never surrender' as USA trade row heats up

WASHINGTON: The US-China trade war escalated Monday as Beijing announced it would raise painful tariffs on $60 billion in US exports by next month, responding in kind to President Donald Trump's decision last week to hike duties on hundreds of billions of dollars in Chinese merchandise.

Trump also ordered U.S. Trade Representative Robert Lighthizer to begin imposing tariffs on all remaining imports from China, a move that would affect about an additional $300 billion worth of goods.

The prospect of the global economy being derailed by the United States and China sliding into a fiercer, more protracted dispute has rattled investors and sparked a sharp selloff on equities markets in the past week. It said a June 17 hearing would be held before Washington decides how to proceed.

"Instead of a full-blown trade war, a "partial trade war" that would see the two sides continue to negotiate is the more likely option", Ronald Chan Keen Lok, Vice President at Target Capital Management, told Al Jazeera. Trump said last month that he would end preferential trade treatment for India, which would result in United States tariffs on up to $5.6 billion of imports from India. In Asia, the Shanghai Composite index fell 1.2per cent. Japan's Nikkei 225 index gave up 0.7 per cent and South Korea's Kospi fell 1.4 per cent.

While U.S. President Donald Trump repeatedly boasted on social media that China will pay for the new tariffs, the reality is the opposite.

China is not to blame of the huge trade deficit the United States runs, and China is a hugely profitable market for USA companies, the paper said, in commentary published under the pen name "Zhong Sheng", meaning "voice of China".

US 10-year Treasury yields, however, edged away from Monday's six-week lows, thanks to the slightly brighter tone.

The United States is "sucking the blood of the Chinese", said a comment left on the "Strong Country" blog of the ruling Communist Party's newspaper People's Daily.

And oil prices edged up after Monday's losses as concerns about the impact on demand from the trade war offset geopolitical tensions in the Middle East, the crisis in Venezuela and "sabotage attacks" on two Saudi Arabian oil tankers.

Hong Kong's Hang Seng Index was down 1.6 percent on Tuesday afternoon.

The Dow Jones Industrial Average dove 612 points, or 2.4 per cent, to 25,332 as of 12.15pm Eastern Time (4.14am NZT). This was the worst one-day drop for the Dow and S&P 500 since January 3rd and the worst day since December for the Nasdaq.

Last Thursday morning the Dow skidded 580 points, only to regain almost 470 by close of trading on Friday. You had a great deal, nearly completed, & you backed out!' Trump wrote on Twitter. They are paid by importers of Chinese goods, usually American companies or the US-registered units of foreign companies.

Trump might meet his Chinese counterpart, Xi Jinping, during next month's meeting of the Group of 20 major economies in Osaka, said Kudlow, his economic adviser, Larry Kudlow.

The increases already in place have disrupted trade in goods from soybeans to medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.

  • Zachary Reyes