US and China begin 'biggest trade war' in history with $34bn tariffs – business live

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All the day’s economic and financial news, as Washington and Beijing impose 25% tariffs on billions of dollars of each other’s exports

11.55am BST

Paul Donovan of UBS argues that the US and China aren’t in a trade war yet….but they will be, if Trump actually slaps tariffs on $500bn of Chinese imports (as he seemed to threaten last night).

Donovan also points out that US consumers will pay these tariffs:

11.53am BST

Europe’s trade commissioner, Cecilia Malmstrom, has tweeted that these new tariffs will hurt the global economy:

Worrying development with escalation of tariffs between US and China. Clearly damaging for the world economy. Trade wars are bad and not easy to win.

11.31am BST

US farmers are understandably concerned about the trade war, which could badly dent their exports.

China is the biggest single market for US soybeans, buying more than half the country’s production. They’ve now less attractive due to the additional 25% tariff being levied by Chinese officials at the border, which might increase demand for Brazilian soy instead.

“If we’re not spending money then other industries aren’t making any money off of us, either.”

10.35am BST

The financial markets continue to take the trade war in their stride. European equities are a little higher, after a positive day in Asia.

Donald Trump’s claim overnight that he could eventually impose tariffs on $500bn of Chinese imports – a truly colossal sum – hasn’t caused any obvious panic.

The dollar index was down 0.10% to 94.30, the single currency rose 0.20% to 1.1715, while the Swiss franc and Japanese yen were treading water.

The Chinese yuan was down only 0.10%. Equities were blinking green across the screen, while bond yields were relatively stable on both side of the Atlantic.

10.06am BST

Robin Bew of the Economist Intelligence Unit points out that tariffs actually hurt the country imposing them, as well as their target.

#US tariffs on #China come into force today, with Trump threatening to expand their scope to all US China trade if there’s retaliation. Important to remember that tariffs ultimately paid by the importer, not the exporter. So US taxing itself. Ho hum….

10.06am BST

Newsflash: China has joined Donald Trump’s trade war, by imposing retaliatory tariffs of 25% on $34bn of US goods.

The Xinhua news agency is reporting that China’s tariffs came into effect at 12.01pm Beijing time – shortly after America fired the opening salvo.

The Latest: China says tariff hikes on U.S. goods took effect.

9.49am BST

The latest reading for the productivity of British workers is out, and they’re unlikely to cheer the chancellor, Philip Hammond, who has made boosting efficiency one of his top priorities.

According to the Office for National Statistics, economic output per hour of work dropped by 0.4% in the first three months of 2018 from the final quarter of last year, amid a strong increase for employment across the UK.

When more people contribute to the economy without generating increased levels of economic output, productivity falls.

9.33am BST

Newsflash: Airbus says is already taking steps to protect itself from Brexit damage:

Significant re Airbus’ warning hard Brexit could force it out of UK. CEO Tom Enders says the company is already putting plans in place:

“Rest assured that we are taking first preparations as we speak in order to mitigate consequences from whatever Brexit scenario may follow.”

Airbus CEO Tom Enders says hard Brexit is worst-case scenario but all Brexits are bad: “Brexit in whatever form, soft or hard, light or clean, whatever you call it, will be damaging for industry, for our industry and damaging for the UK, whatever the outcome will be.”

9.21am BST

Airbus CEO Tom Enders insists he isn’t trying to meddle in UK politics – despite launching such a stinging attack on the government.

More from Airbus CEO Tom Enders on Brexit: “We believe UK should at least stay in customs union, should stay in regulatory bodies such as EASA and ECJ. This is a minimum that would be required to minimise damage to business.” (1/2)

Airbus CEO Tom Enders: “I’m not a politician. Our interference is not to play politics. We owe it to our stakeholders to be truthful about the consequences and those would be severe in the event of an unorderly or hard Brexit.” (2/2)

8.56am BST

Airbus is ‘going for broke’ in its attempts to avoid a damaging hard Brexit, reckons Tom Macleod of Sky News.

After their warning last week, #Airbus CEO Tom Enders going for broke on #Brexit:

“UK government has no clue or at least consensus on how to execute Brexit without severe harm”.

Here’s why @BorisJohnson should give a f*** about business: 239 @Airbus A320s were made in last 6 months. All 478 wings were made in Wales

8.34am BST

Back in Britain, the boss of Airbus has launched an absolutely blistering attack on the UK government’s Brexit strategy.

CEO Tom Enders has told reporters that Theresa May’s administration has “no clue” about how to execute Britain’s departure from the European Union without causing ‘severe harm’.

Airbus CEO Tom Enders: “The sun is shining brightly on the UK, the English team is progressing towards the final, the RAF is preparing to celebrate its centenary and HMG still has no clue, no consensus on how to execute Brexit without severe harm.”

Airbus CEO Tom Enders: “This is a very discomforting situation for us.” Says some people have said business should not speak up but they owe it to their shareholders to do so.

“Let’s see what comes out of Chequers, white smoke, black smoke or no smoke.”

Airbus boss Tom Enders goes in studs up on the government over Brexit policy. If anyone was expecting Airbus to back off after warning it could leave the UK, think again.

Airbus CEO Tom Enders starts with swipe at Whitehall “Her Majesty’s Govt still has no clue or consensus on #Brexit… a discomforting situation for us” #FIA18

8.26am BST

Anticipation is building in the markets, as traders wonder when China will deliver on its promised retaliation.

Mike van Dulken of Accendo Markets says Beijing is “teasing the markets” by delaying its response to America’s move, making it clear that the US fired the first shots.

So we’ve had the imposition ‘tit’, but as yet no reciprocation ‘tat’

8.24am BST

The American Chamber of Commerce in China has appealed to both sides to negotiate a settlement.

Chairman William Zarit warned:

“There are no winners in a trade war.

We urge the two governments to come back to the negotiation table.”

8.09am BST

“Buy on the sound of cannons” is an old City maxim. And today, traders are buying on the sound of tariffs.

Asian stock markets have actually risen today, despite Donald Trump pulling the trigger on Chinese imports. China’s Shanghai Composite index has gained 1%, with Hong Kong close behind.

The first batch of US tariffs on China came into force – it is a milestone in the trade war but a very well-telegraphed one. China said it’s forced to retaliate, but did not specify a time-frame, helping risk appetite.

Trump repeated his claim that China is “killing us” on trade at a rally in Montana last night – but his pattern so far has been to respond to the response – so China’s delay in retaliation may slow down the war.

7.53am BST

China’s newspapers are very critical of Donald Trump for launching the trade war, accusing the US president of leading a ‘gang of hoodlums’.

Our Beijing bureau chief, Lily Kuo, reports:

“If what the US wants is to escalate a trade war with China, then so be it. A little fighting may be the only way the Trump administration clears its mind and allows everyone to sober up,” the state-run Global Times said on Friday.

“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. On Thursday, a spokesperson for China’s ministry of commerce said the US will be “opening fire on the whole world and also opening fire on itself.”

Related: China ‘ready to fight back’ as US begins trade war

7.40am BST

China has swiftly hit back, accusing the United States of starting “the biggest trade war in economic history”

The country’s Commerce Ministry said imposing tariffs on $34bn of Chinese sales into America would hurt the global economy, damage large companies and consumers.

“China is forced to strike back to safeguard core national interests and the interests of its people.”

US has ignited largest trade war in economic history: China’s MOC

7.19am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.

The trade war between America and China has begun, as Donald Trump delivers on his threat to hit $34bn of Chinese imports with new 25% tariffs.

“34 [billion dollars], 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? So we have 50 plus 200 plus almost 300.”

Related: Escalation of trade war will hurt US most, Mark Carney tells Donald Trump

Related: Theresa May battles to see off revolt ahead of key Brexit summit

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Source: china
Link : US and China begin ‘biggest trade war’ in history with bn tariffs – business live


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