China trade war sinks the Australian dollar, Wall Street, oil and gold

Posted July 12, 2018

'Tariffs on $200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families, ' trade lawyer Scott Lincicome said. It said Beijing would take unspecified "necessary countermeasures" to protect its "core interests".

"As a result of China's retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports", U.S. Trade Representative Robert Lighthizer said.

US President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of US imports from China past year.

While China's theft and coercion of intellectual property from foreign companies is a widely acknowledged problem, trade experts are largely skeptical of Mr. Trump's strategy to deal with it through punitive tariffs. Hong Kong's main index shed 1.3 per cent.

The Dow Jones tumbled 219 points, or 0.9 per cent, to 24,700.

Some US business groups and senior lawmakers were quick to criticise the move. "When they see their prices rise, they're going to be shocked", he said.

Ivanka's products remain untouched by these tariffs and the fashion line is continuing to work with and create order contracts for Chinese shoe suppliers, such as Chengdu Kameido Shoes and Hangzhou HS Fashion.

The news could "bring some negative emotion to financial markets in the short term, but over the long run, fundamentals of Chinese financial markets have not changed, and (investors) shouldn't over-value its impact", Guan Tao, former director of the worldwide payments department at China's State Administration of Foreign Exchange (SAFE) was quoted as saying by the state-owned Xinhua news agency.

The US Chamber of Commerce, which had supported Mr Trump's domestic tax cuts, was less enamoured of his tariff policies.

Mr Trump has threatened to tax $550bn (£415bn) in Chinese products - exceeding America's total imports from China past year.

Lighthizer said the initial $50 billion in US tariffs were aimed at goods that "benefit from China's industrial policy and forced technology transfer practices".

They also said they remain open to working with China to try to resolve the dispute, but the response from Beijing so far has been unsatisfactory.

"Tonight's announcement appears reckless and is not a targeted approach", said Senate Finance Chairman Orrin Hatch in a statement.

Robert Holleyman, the US official in charge of trade with Asia during former president Barack Obama's second term, described the tariffs as "tax hikes on USA imports".

Containers are transferred at a port in Qingdao in China's eastern Shandong province on July 6, 2018.

"The dollar has managed to gain even against the yen due to ongoing trade concerns, with commodity-linked currencies having slid along with the downturn in commodities and providing a broad lift for the dollar", said Ichikawa at Sumitomo Mitsui Asset Management.

While China has vowed to hit back with counter-measures, it can not use reciprocal tariffs as its imports of U.S. products are vastly smaller than its exports.