As new tariffs hit, US, China seek to avert more economic damage

China says must

Meanwhile, in China the economy has shown signs of weakness in recent months - a circumstance Trump has said gives the U.S.an advantage.

Beijing has denied U.S. allegations that it systematically forces the unfair transfer of United States technology, and has said that it adheres to World Trade Organisation rules.

Ironically, the goods the United States has targeted are mostly intermediate products manufactured in China by multinational companies imported by US-based manufacturers, and miss Chinese firms, according to analysts.

Economists also believe that every $100 billion of imports affected by tariffs would reduce global trade by around 0.5 percent.

From Harley-Davidson motorcycles and American bourbon to Chinese parts and machinery, the world's two largest economies have exchanged punitive tariffs that slice through a wide swath of products.

"On behalf of doctors, thank you for pointing out the need to wean off American goods like bourbon and bacon", she added, referencing Chinese retaliatory tariffs on U.S. products.

The official Xinhua news agency, citing the government tariff commission, said later that Beijing had imposed tit-for-tat tariffs at the same time as the U.S. duties came into force.

Trump has been unapologetic, insisting that his tough tactics will work, even as American businesses and the Federal Reserve warn of the harm already felt in the economy.

The administration already was forced to announce a $12bn aid programme for farmers hurt by the trade wars, as USA agricultural products, like soybeans, were an easy target for China and others. The latest round of U.S. tariffs target electronics, plastics, chemicals, semiconductors and other goods from the "Made in China" industrial plan to upgrade Chinaese manufacturing capabilities.

The tariffs took effect this morning amid two days of talks in Washington between officials from both sides.

This week's talks are also taking place as hundreds of executives and officials from USA companies, trade groups and other entities have descended on Washington to weigh in on the administration's planned tariffs on the additional US$200 billion in Chinese imports.

China so far has retaliated in kind, hitting American agricultural goods and autos in July, along with new taxes on more than 300 United States products Thursday.

However, Trump on Monday told Reuters in an interview he did not "anticipate much" from this week's talks.

Though it is too early for trade damage to show up in much economic data as yet, tariffs are beginning to increase costs for consumers and businesses on both sides of the Pacific, forcing companies to adjust their supply chains and pricing, with some USA firms looking to decrease their reliance on China. -China relations at the Center for Strategic and International Studies in Washington.

China said it will also file a legal challenge with the World Trade Organization (WTO) over the US' increase, which American officials say was a response to unfair trade practices by Beijing.

In an interview with the business channel CNBC, he said, "I'm willing to go to 500", referring roughly to the $505.5 billion in goods imported previous year from China.

Chinese authorities have said they would take "comprehensive measures", which companies worry could mean targeting operations of U.S. firms in China for disruption.

The initial list of USA demands presented to China in May included a call for a US$200 billion reduction in America's annual goods trade deficit with China by 2020 - which stood at about US$375 billion previous year - and an end to industrial policies that the USA claims violates global trading rules.

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