US Trade War Intensifies: Colossal New Sanctions Announced by Trump; America in For Long Haul
Russia and China may reach frontiers of cooperation with more ambitious goals. Vladimir Putin talked about it at the meeting with Chinese Vice Premier Han Zheng today. Putin emphasized that the visit will help implement the plans he recently arranged with Xi Jinping in Vladivostok. There are actual steps taken in the field of energy and investments as well as cooperation between Chinese companies and Gazprom and Rosneft. However, Beijing can't develop cooperation with Washington. A small trade dispute between the US and China has turned into a full-scale trade war, which the world hasn't seen since the 1930s. That's the headline of today's British Financial Times.
The scope of the trade dispute was evaluated by our reviewer Nailya Skerzade.
— Nailya, good evening. As far as I understand, the USA has gone on the offensive.
— Yes, Igor. On Tuesday night, US President Donald Trump instructed to introduce new tariffs on goods from China for the colossal amount of $200 billion.
The changes will take effect on Monday. Washington also threatened that if China responds to US actions, the tariffs will increase by another $267 billion. It turns out that all imports from China are under threat. Chinese exports to the USA $505.5 billion.
Geng Shuang, Ministry of Foreign Affairs of China: «In response to US's measures, China will have to take countermeasures to protect its legitimate rights and interests, as well as to maintain the global order of free trade. The US's new measures have brought uncertainty into the relationship between our countries».
Beijing has already announced the introduction of tariffs on 5,200 items of goods from the US worth $60 billion. The countermeasures will come into force on Monday. China also initiated proceedings in the World Trade Organization. And here's how the actions of China are regarded by Donald Trump, who, despite the early morning, commented on the situation on Twitter.
«China has openly stated that they are actively trying to impact and change the results of our elections, attacking our farmers, ranchers, and industrial workers because they support me. China does not understand that these people are true patriots, who fully understand that Beijing has been trading with the United States for too many years only to its own benefit. They also know that I am the one who can put an end to it.»
I'll remind you, that this is not the first time China was accused from overseas. This summer, in connection with the alleged theft of American intellectual property and technology, and also because Beijing resorts to unfair trade practices, the US already introduced $50 billion worth of tariffs in July and August.
— How will this war affect the economies of the two countries? For whom will this blow hurt more?
— Igor, the first tariffs have already slowed the growth of China's economy by about 0.1-0.3%. China's response measures affected the US's economy to a lesser extent. But the International Monetary Fund warned this summer that the US's introduction of new tariffs could slow the growth of the world economy by 0.5%.
— For how long will this trade confrontation last?
— It's scary to think — for two decades. That forecast was made by Chinese businessman, founder of the Alibaba Group, Jack Ma. In his view, in order to circumvent US tariffs, Chinese companies will have to transfer their production to other countries. Jack Ma is sure that even if Donald Trump resigns, the new US president will still continue the policy towards China begun by Trump.
I'll remind you that China is the largest holder of US Treasuries more than a trillion dollar's worth of them. That means a gradual sale of them could seriously damage the US economy and the dollar.
— Thank you. This was my colleague Nailya Skerzade.