China to fight U.S. tariffs at any cost

China to fight U.S. tariffs at any cost

Xi said that China will take measures to sharply widen market access for foreign investors.

But in a veiled swipe at US President Donald Trump's America First stance, Mr Xi called for openness.

The Associated Press reported Monday that Xi said at a business conference that he would move to "significantly lower" China's auto import tariffs and lessen restrictions on foreign ownership in its auto industry.

Xi did not directly address the trade dispute in his speech. It has fueled fears the global economic recovery might be set back if other governments are prompted to raise their own import barriers.

The rising trade tension between the world's two largest economies follows a U.S. finding that China was engaging in unfair trade practices in connection with intellectual property protection.

China and Hong Kong stocks firmed on Tuesday, as Chinese President Xi Jinping's vow to further open up the economy in a speech at the Boao forum eased worries over rising trade tensions between the world's largest economies.

Following this tit-for-tat escalation, Trump then announced that he would be instructing the United States Trade Representative to consider another $100 billion worth of trade penalties. This is a small amount compared to the $60 billion in tariffs imposed by Trump on Chinese products, but it could be the beginning of retaliation by the Chinese. The US has also not only focused on curbing the rise of Chinese products in US markets that have led to the staggering $375 billion deficit in China's favour, but it has also opted to look into using anti-dumping regulations against many Chinese products as well.

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Amongst the things he talked about included lowering import tariffs for vehicles, and improving transparency, and intellectual property rights protection. When China initially announced a 25-percent tariff on USA beans, the market collapsed by over 50 cents per bushel, a loss of nearly 5 percent in value overnight. Canada, Mexico and Japan were the top exporters of cars to the U.S. If that fails, the Chinese government can ask for a ruling from a WTO panel of experts.

"It is a battle between unilateralism and multilateralism, and between protectionism and free trade as well", Commerce Ministry spokesman Gao Feng said, according to official news agency Xinhua. The most immediate casualties will be USA exporters. Notice, however, that they typically involve cases where the company in question produces for China in China; and thus has little impact on US employment. -China Business Council, which represents companies that deal with China, welcomed Xi's announcement but expressed hope for additional steps such as ending requirements for joint ventures and technology licensing. The administration will hold a public hearing for USA businesses on May 15th. He argued that the situation could be a "win-win" for China and the U.S. if Beijing opens up its economy.

Chinese regulators announced that intention in November, just after Trump ended a high-profile visit to Beijing, but gave no timeline or details.

"Nothing less than the U.S.´s economic future is at risk from China´s assault on American technology and IP, and its mercantilist bid to capture emerging high-tech industries", he said. China's plan to more than triple tariffs on soybean imports to 35 percent will be among the most impactful on Missouri farmers, along with its new 15 percent tariff on pork imports and 25 percent tariff on cotton. Other automakers such as General Motors and Volkswagen that assemble vehicles in China with local partners could offer additional models.

"The tone was conciliatory but Washington is bargaining for action, not promises". The tariffs originated in a US effort to stem the almost $500 billion trade deficit in goods with China.

Josh Crabb, head of Asian equities at Old Mutual Global Investors, has also increased allocation to Chinese equities on the view they are still cheap and that the trade dispute will be resolved. However, any serious move by the USA in terms of protectionism on India's export of services would have a disastrous impact on the country's current account balance of payments, rupee exchange rate and also on the employment levels.

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