U.S. President Donald Trump said on Thursday that tariffs on $34 billion worth of Chinese goods will kick in at 12:01 a.m. EST on Friday morning. Another $16 billion are expected to go into effect in two weeks, he said. He told reporters he would also consider imposing additional tariffs on $500 billion in Chinese goods, should Beijing retaliate against the already-scheduled actions.
China had said it will not "fire the first shot," but its customs agency made clear on Thursday that Chinese tariffs on U.S. goods would take effect immediately after U.S. duties on Chinese goods kick in.
China, for its part, was already calling the tariff threats between Beijing and Washington a "trade war" in June.
Steep American tariffs on Chinese goods worth tens of billions of dollars take effect at midnight Thursday, as US President Donald Trump fires the decisive salvo in a trade war between the world's top two economies.
Beijing has vowed to retaliate dollar-for-dollar, "immediately" imposing counter-tariffs on American exports despite warnings the burgeoning conflict will send shockwaves around the global economy and strike at the heart of the world trading system.
En route to Montana aboard Air Force One on Thursday, President Donald Trump erased any hope of a last-minute change, confirming the China tariffs would indeed kick in at the stroke of midnight.
Economists say the trade war comes as the expansion of the world's largest economies -- which is bolstering demand for US goods and services -- may be starting to run out of steam, raising the risks that tariffs could harm growth.
The Trump team has paid little heed to such warnings, with Commerce Secretary Wilbur Ross this week slamming them as "premature and probably quite inaccurate."
The US will levy a 25 percent tariff on more than 800 Chinese product categories, worth around $34 billion in annual imports, and has warned of more to come if China retaliates.
- Trump's round two to follow -
Trump has threatened to progressively ratchet up US 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.
The tariffs target a broad spectrum of Chinese goods -- such as passenger vehicles, radio transmitters, aircraft parts and computer hard drives -- from industries Washington says have benefited from unfair trade practices.
A second tranche of 284 goods worth $16 billion a year is currently under review and could be added to the US list.
China is expected to retaliate as soon as the US tariffs go into effect, imposing duties on goods worth roughly the same amount but with a greater emphasis on politically sensitive agricultural products.
"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's commerce ministry spokesman Gao Feng.
This trade war has been a long time coming; and it is long overdue.
For literally DECADES, China has used it's state-owned industries to drive foreign competitors out of business. In industry after industry, Chinese firms, supplemented by Chinese government money, dumped all manner of cheap products on markets worldwide, until they drove foreign competitors (who weren't getting government subsidies) out of business. Then China raised prices in every market they had cornered.
What they couldn't drive out of business, they co-opted; demanding technical secrets from firms wishing to sell products in China.
They then used those technical secrets to manufacture their own competing products.
What they couldn't co-opt, they often outright STOLE. State-sponsored computer hacking by China literally hacked-into and STOLE technological developments from companies around the world, then reverse-engineered that technology into their own. This commercial espionage hits all manner of companies; especially firms in our defense sector.
Even here at The Hal Turner Radio Show, there are literally HUNDREDS of security alerts every WEEK, generated from IP addresses in China. From things like brute-force password attempts at the main web site interface, to MySQL injection attempts, Cross-site scripting attempts, Malicious User Agent (MUA) attempts and more. They are utterly RELENTLESS at attempting to gain access to protected areas of this (and other) web sites as well as email/file systems. All those attempts have thus far, failed.
So determined are the Chinese to literally STEAL from others, that they even send perfectly legitimate emails to corporations, with claims of a trivial nature, just to generate a human reply email so that China then gets the IP address of origin computers; which they then try to penetrate.
Even at my own HOUSE, it was necessary to install an intrusion-prevention security appliance far above simple anti-virus software. Each and every night, that security appliance detects and prevents literally dozens of sophisticated intrusion attempts against the computers in my HOUSE. Who know, maybe they do this to YOUR house, too?
China has cheated and STOLEN their way into manufacturing. They are now a very significant global player, at the expense of fair play and honesty with everyone else.
That ended at 12:01 AM today.
Now, Chinese goods are being Tariff'd. This makes them more expensive - thus leveling the playing field for American manufacturers. People will see Chinese made goods - and their low quality - costing the same as American made goods of better quality. Most folks will opt to buy the better-made goods. As more American-made products sell, that means AMERICANS WORK.
It also means fewer and fewer sales of Chinese made goods, which then puts CHINESE out of work.
Get several million Chinese out of work, and you see political unrest inside China.
Add to that unrest, reduced inflow of cash because they aren't selling as much anymore, and you now have a cash-strapped China, with political unrest from out-of-work Chinese.
China will have two choices: Continue with their unfair practices, and go belly-up; or level the playing field.
Since the trade imbalance between the US and China is so incredibly dramatic (China sells far more to the US than the other way around) China will lose this trade war. There is no other possible alternative.
The trouble with trade wars is that sometimes they turn into shooting wars. China has known this, which is why they built artificial islands in the South China Sea and erected military bases, anti-ship missile systems and military air fields on those islands. China wants to be able to forcibly control the $6 TRILLION a year in trade shipments which travel in that area!
The building of those artificial islands was all part of a very long range plan to allow China to absolutely control trade, not just their own, but others too. In other words, what they cannot run out of business via dumping cheap goods, and what they cannot co=opt by demanding technical information, and finally, what they cannot steal via computer hacking, they plan to take by force through the militarized artificial islands. These are NOT good-intentioned people.
If they choose the actual war route, they will fare far worse.