Soybean Farmers Stick with Trump Even in Face of Stiff China Tariff

WASHINGTON DC- JULY 05 U.S. President Donald Trump waves from the North Portico of the White House while departing on a trip to Wyoming to attend a Make America Great rally

WASHINGTON DC- JULY 05 U.S. President Donald Trump waves from the North Portico of the White House while departing on a trip to Wyoming to attend a Make America Great rally

The opening shots of a trade war were fired when the Trump administration imposed a 25 percent tariff on $34 billion of imports from China, and Beijing promptly retaliated with duties on an equal amount of American products.

Hours before Washington's deadline for the tariffs to take effect, U.S. President Donald Trump upped the ante, warning that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount of U.S. imports from China past year.

Shortly after the tariffs took effect, China said it is "forced to make a necessary counterattack" to a USA tariff hike on billions of dollars of Chinese goods but gave no immediate details of possible retaliation.

Retaliatory tariffs from China could lead to a 59 percent decrease in OH farmers' net income within six years, a group representing Ohio's soybean industry said.

It has increased sharply since 2001 when China joined the World Trade Organization and started to significantly improve its economic position and relations worldwide.

Chinese President Xi Jinping (left) and US President Donald Trump in Florida past year.

In a note on the China-US trade war, ING chief economist Rob Carnell said that while this is not "economic Armageddon", it is "applying the brakes to a global economy that has less durable momentum than appears to be the case".

There were other secondary effects on confidence, investment and global supply chains to be considered, besides the impact on the economy through financial markets, wealth effects and corporate funding, he said.

'There should be no doubting Beijing's resolve, ' the newspaper said.

On the streets of Beijing, there were some concerns that prices would rise due to the tariffs but also a determination to support the Beijing authorities in the trade war. Part of his plan is to radically change how U.S. trade deals work and to focus on protecting the domestic economy.

Six months of wrangling over trade tariffs with the United States has wiped out about a fifth of China's stock market value and driven its currency down sharply. Asian equities wobbled but also managed to end up.

The National Retail Federation: "With tariffs against China taking effect, American consumers are one step closer to feeling the full effects of a trade war", Matthew Shay, president and CEO of The National Retail Federation, said in a statement Friday.

BMW said it could not absorb all of the 25% tariff on the cars it exports to China from a plant in Spartanburg, South Carolina and would have to raise prices. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey. "It seems like he has another campaign going on in 2020", the company owner Li Jiang said. "Manufacturers in the United States succeed when the rules are clear and fair and markets are open".

"These tariffs are ill-conceived and totally inappropriate", Heck said.

"The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China", said an English-language article in the China Daily.

Trump has "ignited the biggest trade war in economic history", the Chinese Ministry of Commerce said.

Meanwhile, NBC News reports red-state farmers, who voted overwhelmingly for President Trump, are bracing for the fall-out of what's shaping up to be a nasty trade war.

"You have another 16 [billion dollars] in two weeks, and then, as you know, we have $200bn in abeyance and then after the $200bn, we have $300bn in abeyance. OK? Okay? So, we have 50 plus 200 plus nearly 300", he told reporters on Thursday.

And signs are growing that the escalating global trade dispute is already affecting the world's top economy, with punitive duties now in place for steel and aluminium and the White House threatening to slap duties on auto imports.

The direct impact on China's economic growth in 2018 is estimated at 0.1-0.3 percentage points while the drag on its export growth is expected to be 1 percentage point.

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