A trade war between US and China officially began on Friday as President Donald Trump’s administration imposed tariffs on $34 billion worth of Chinese products, with Beijing vowing to “fight back”.
The penalties went into effect at 12:01 a.m., reports The New York Times.
Minutes after the tariffs went into effect, a spokesperson for China’s Commerce Ministry said in a statement: “China promised not to fire the first shot, but in order to safeguard the country’s core interests as well as that of the people, it is forced to fight back.”
The statement did not however, provide details on its retaliation.
The administration’s 25 per cent tariffs are targeting Chinese products such as industrial machinery, medical devices and auto parts.
On Thursday, Trump showed no signs of backing down from his fight and suggested the possibility of tariffs on almost $500 billion more of Chinese goods.
“Thirty-four, and then you have another 16 in two weeks and then, as you know, we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?” Trump told reporters aboard the Air Force One.
“So we have 50 plus 200 plus almost 300.”
Following Friday’s development, rhe Shanghai Composite index fell 1.1 per cent, after reaching more than a two-year low this week, reports the Guardian.
Chinese manufacturers have already been hit by a strengthening yuan that has made exports more expensive.
Trump and his advisers argue the tariffs are necessary to pressure China into abandoning unfair practices such as stealing intellectual property and forcing American companies to hand over valuable technology, reports CNN.
In addition to the tariffs, the White House is placing restrictions on investment and on visas for Chinese nationals.
The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union.
American tariffs on steel and aluminium imports have provoked retaliatory measures against billions of dollars of American exports.