US tariffs on Chinese imports took effect on Friday at 4:00 a.m. GMT amid concerns of international investors and businesses. China has imposed a 25% tax on $34 billion worth of US goods in response to the similar move by Washington.
"China promised not to fire the first shot, but in order to defend the core interests of the country and interests of the people, we are forced to take necessary countermeasures," China's Commerce Ministry was quoted by AFP in a statement.
"The United States has violated WTO rules and launched the largest trade war in economic history to date," China's Commerce Ministry's statement as quote by AFP. "This type of tariff levying is typical trade bullying, and seriously jeopardizes the security of the global industrial chain and value chain, hindering the pace of global economic recovery and triggering global market turmoil," the statement stressed.
The US Tariffs on Chinese exports will aplly to engines, motors, construction and farming machinery, electric transportation, telecom equipment and various precision instruments. Counter measures by China will reportedly hit US agricultural commodities, vehicles and aquatic products. Soybeans are the country's biggest import from the United States in terms of value, Reuters reported.
Morgan Stanley has reportedly estimated that world trade could be seriously affected as two-thirds of goods traded are linked to global supply chains.
Hong Kong shares slumped in the morning session on Friday as US tariffs on Chinese imports took effect, marking the start of US President Donald Trump's trade war with China, AFP reported.
According to Reuters, the Shanghai Composite index, which recently tumbled into correction territory, fell 0.3 percent during morning trading.
The US Chamber of Commerce said earlier this week that retaliation from China, Canada, Mexico and the European Union in response to Donald Trump's tariffs was already affecting nearly $75 billion in US Exports, AFP reported.
In June, Trump said he asked the US Trade Representative to come up with $200 billion worth of Chinese goods to be included in the 10-percent tariffs list. The US presiden also warned that he would pursue tariffs on an additional $200 billion in Chinese products if China again responds to US duties.
Trump said he made the decision after China announced retaliatory tariffs on $50 billion worth of US products on June 15. China's reciprocal move came in response to Trump's announcement earlier that same day that the United States would impose 25-percent tariffs on $50 billion worth of Chinese technology.
The situation in global trade significantly escalated after Donald Trump introduced a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports in March. Tensions further sharpened when he extended these duties to the European Union, Canada, and Mexico, who were temporarily exempted from the measures.
The US moves have prompted worldwide outrage. China, India, the European Union, Canada, Mexico, Norway and Russia have since lodged complaints with the WTO against the restrictive measures imposed by Washington.