China tariffs: Losers outnumber winners in this trade war

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The company's stock fell as much as 3 percent before reversing course to close almost 3 percent higher.

Ross, in an interview with CNBC, downplayed Beijing's retaliation, saying the $50 billion in US exports targeted for sanctions only amounted to about 0.3 percent of US GDP.

In the political realm, however, Xi enjoys advantages that may allow him to cope with the economic fallout far better than Trump can.

With the focus on China and the USA, not many analysts picked up the cry of pain from Germany that met China's response to the U.S. tariffs.

"...up until now China has not come to the table", Lipton said.

Experts had long predicted that China would target USA agriculture products and airplanes.

At the same time, Chinese officials seem to believe they can take advantage of what they consider vulnerabilities in the USA political system.

The Distilled Spirits Council, a US industry group, asked the United States and China to reach a resolution without subjecting American whiskey to more tariffs, which it said would harm Chinese consumers, its hospitality sector and USA whiskey exporters. The high ranking official said that American punitive action over China could be done as the latter behaved in a predatory manner when it involved technology.

There are already signs it might.

The growing battle of tit-for-tat exchanges of tariffs between the U.S. and China has raised fears of a possible trade war that could have a damaging economic impact globally.

In addition, many jobs may be at risk in both countries, as sales and profits would decline as the cost of goods and services rise, experts say. For example, by imposing tariffs on soybeans, they were targeting the residents of Iowa, which tend to lean Republican.

China's foreign ministry spokesman Geng Shuang said Beijing had hoped talks would resolve the issues and blamed the United States for the trade dispute.

Responding to Mr Trump's comments, the commerce ministry reiterated in a statement that China was not afraid of a trade war even though it did not seek one, and said the conflict had been provoked by the US.

The tit-for-tat among the world's two largest economies sent global investors scurrying for cover.

China, by contrast, has unique tools to counteract USA tariffs, according to analysts. So unless China's economic policy officials want to shoot themselves in the foot, they're not likely to shut down Cummins' presence in the country - especially considering the company's reputation for quality.

While the new tariffs avoid these goods for now, costs will increase for American manufacturers who depend on Chinese machinery and imported parts.

Global stock markets tumbled on fears of a rising dispute between the United States and China.

The document signaled a bipartisan shift in Washington's posture toward China after decades of economic cooperation and concessions.

"China needs to have some counter measures ready if the trade skirmish drags on", he said. China has to change this illegal and unfair practice that they've been in.

All the talk of a possible trade war between China and the United States could go nowhere - both sides could back away from this game of chicken. And that makes the country a more formidable opponent than Trump may have anticipated.

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