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Here’s who pays the price for brewing U.S.-China trade war
China counterpunched with new tariffs against U.S. products in the latest round of an escalating trade fight between the world's two largest economies. The Chinese announced plans for 25 percent tariffs on a list of American goods, including soybeans, cars and chemicals, mirroring a Trump administration action hours earlier. Lisa Desjardins reports.
It is the latest round in an escalating trade fight between the world's two largest economies. China counterpunched today, with new tariffs against U.S. products. The move fueled fears of disrupting trade that totals $650 billion a year.
Lisa Desjardins begins our coverage.
In Beijing, China's vice commerce minister declared his country is reluctant to do battle, but ready.
Wang Shouwen(through interpreter):
China doesn't want a trade war, because there will be no winner in a trade war. If someone insists on starting a trade war, China will fight until the end.
With that, the Chinese announced plans for 25 percent tariffs on a list of American goods, including soybeans, cars and chemicals, totaling $50 billion.
It mirrored Trump administration action hours earlier, 25 percent tariffs on Chinese products worth $50 billion, largely on high-tech goods like robotics, machinery and medical devices.
Both lists are just threats at the moment, not yet implemented, but a kind of economic stare-down. In Washington, President Trump's new economic adviser, Larry Kudlow, sought to soothe fears of an all-out trade war, and even suggested the tariffs may never take effect.
It's part of the process. I mean, I would take the president seriously on this tariff issue. You know, there are carrots and sticks in life, but, he is ultimately a free trader.
Separate tariffs on Chinese steel and aluminum imports did take effect last month. China hit back, with duties on 128 U.S. food imports.
Meanwhile, on Twitter, the president kept up his tough talk today, writing- "The trade war was lost many years ago by the foolish or incompetent people who represented the U.S." He said the result was a $500 billion deficit with China.
At the White House, spokeswoman Sarah Sanders had this to say:
Sarah Huckabee Sanders:
We finally actually have a president who's willing to stand up and say, enough is enough. We're going to stop the unfair trade practices, and we're going to work through the process over the next couple months.
Beijing insists the Trump approach on trade is a mistake.
Zhu Guangyao (through interpreter):
This kind of capricious and impetuous action will not solve the problem. The premise of negotiation is mutual understanding and mutual compromise, rather than demanding sky-high prices.
China's strategy seems to hit President Trump where his base can feel it, in the Farm Belt. China has targeted some lesser-known grain crops for weeks, but now is raising the stakes, threatening the U.S. soybean farmers, who sell a third of their crop to China.
The president of the American Soybean Association said today that hundreds of thousands of farmers stand to lose.
Republican Senator Chuck Grassley of Iowa sounded his own warning. He said in a statement that "Farmers and ranchers shouldn't be expected to bear the brunt of retaliation for the entire country." Grassley promised the Senate Finance and Judiciary Committees will take a close look at the president's plan during a 60-day comment period.
For the "PBS NewsHour," I'm Lisa Desjardins.
The Chinese announcement whipsawed Wall Street. Stocks dove at the opening bell, and then rallied back. The Dow Jones industrial average had initially dropped 500 points, but ended up gaining 230 points to close at 24264. The Nasdaq rose 100 points, and the S&P 500 added 30.
We will get the White House perspective on all of this from senior adviser Peter Navarro right after the news summary.
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