Time difference gives China head start on tariff war with U.S.

Donald Trump

Donald Trump

Michael Hewson, the chief market analyst at CMC Markets UK, said: "In a holiday shortened United States session before the 4 July holiday, USA equity markets finished lower on the day as trade concerns kept investors cautious".

Trump initially threatened to hit China with 25 per cent tariffs on a list of goods worth US$50 billion annually, over what Washington says is the rampant theft of U.S. technical know-how.

In meetings in Brussels, Berlin and Beijing, senior Chinese officials, including vice-premier Liu He and top diplomat Wang Yi, have proposed an alliance between the two economic powers and offered to open more of the Chinese market in a gesture of goodwill.

But the European Union, the world's largest trading bloc, has rejected the idea of allying with Beijing against Washington, five European Union officials and diplomats told Reuters, ahead of the summit.

But the EU rejected any idea of allying with China against Washington ahead of a Sino-European summit in Beijing on July 16-17.

As the world's most powerful economy, the United States plays a vital role in global economic and trade rule-setting and it is always able to find seemingly plausible reasons for its initiative targeting China.

It now runs a large trade deficit with China, its biggest trading partner.

"The US has provoked this trade war, we do not want to fight it, but in order to safeguard the interests of the country and the people, we have no choice but to fight", said China commerce ministry spokesman Gao Feng.

Beijing officials on Wednesday delayed implementing retaliatory tariffs by 12 hours - not wanting to draw first blood in a potential trade war.

The industry source said Beijing had been unable to address the Trump administration's concerns on Chinese trade policies in at least five key area, including forced technology transfers, Chinese industrial overcapacity, government subsidies, SOE reform, and Beijing's restrictions in the cloud computing industry.

While Trump touts announcements of jobs created in steel plants due to the tariffs, manufacturing industries warn that many more jobs will be lost in companies producing autos, auto parts, appliances and other goods that depend on imported components.

Still, China's stance is striking given Washington's deep economic and security ties with European nations.

US President Donald Trump's administration is set to impose tariffs on US$34 billion worth of additional goods from China on Friday citing unfair Chinese trade practices, and has threatened successive waves of duties on up to US$450 billion in Chinese imports.

China has warned that it won't yield to Trump's pressure.

Another official described the dispute between Trump and Western allies at the Group of Seven summit last month as a gift to Beijing because it showed European leaders losing a long-time ally, at least in trade policy.

Trump has threatened to progressively ratchet up USA penalties to a total of $450 billion in goods - which would represent the lion's share of all of China's exports to the United States.

A report by New York-based Rhodium Group, a research consultancy, in April showed that Chinese restrictions on foreign investment are higher in every single sector save real estate, compared to the European Union, while numerous big Chinese takeovers in the bloc would not have been possible for EU companies in China. China's plans to move rapidly to electric vehicles mean that any new benefits it offers traditional European carmakers will be fleeting.

In May, the White House had said it would announce curbs on Chinese investment in USA technology by June 30 and impose those restrictions shortly thereafter.

The Central Bank of Nigeria is wooing local businesses importing goods from China to use the yuan instead of the United States' dollar in its effort to support the naira and boost reserves.

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