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Published: Thu, July 05, 2018
Economy | By Melissa Porter

USA and China battle it out through travel warnings

USA and China battle it out through travel warnings

The first round of USA tariffs on $34 billion in Chinese products is scheduled to take effect July 6, and China has pledged to push back with levvies on an equal number of American exports.

The United States has listed another 284 product lines valued at $16 billion that it will target with tariffs, including semiconductors and a broad range of electronics.

The Commerce Department launched its investigation, on grounds of national security, on May 23 under orders from Trump, who has frequently complained about the EU's 10 percent auto tariff being four times that of the United States, apart from the 25 percent USA levy on pickup trucks. And for good reason: the nascent global trade war could represent the biggest single threat to the economic upswing that has helped the region get past its financial crisis.

In the brewing trade war between the United States and China, Beijing officials consistently seek to portray their nation as simply being on the defensive against Donald Trump's aggressive tactics.

The data suggest that the synchronized worldwide growth that sustained global markets and company earnings for much of a year ago is already starting to run on empty.

When your entire economy is heavily dependent on trade, an overall slowdown in global commerce caused by tit-for-tat import taxes provokes fear and undermines confidence.

Germany's DAX lost 0.1 percent to 12,337 while the CAC 40 of France rose 0.3 percent to 5,329.

Many European companies would suffer because they both produce and sell goods in the USA and China, the world's biggest economies.

Europe's tech sector was fell 1-1/2 percent led by falls in chipmakers STMicro and Infineon, which were down by almost 8 percent and 2.5 percent respectively.

This hegemonic mentality is unsafe for the world economy, which requires close cooperation and normal competition, not a damaging trade war, to achieve sustainable growth.

"At this point, the probabilities for both scenarios having major impacts on the technology sector in the short term are low", Garnry said. Japan's Nikkei erased earlier losses to stand flat by late afternoon.

U.S. markets were closed on account of the U.S. Independence Day holiday. But as part of the efforts to address outstanding trade disputes, Europe will present a complaint before the World Trade Organisation against China's intellectual property practices.

Brent oil prices rose, driven higher by a threat from an Iranian commander and a drop in USA crude inventories for the second week in a row caused by an outage at a Canadian facility.

CURRENCIES: The dollar fell to 110.51 yen from 110.59 yen on Tuesday.

Global benchmark Brent futures rose 0.1 percent to $77.84 a barrel.

"As terrorist attacks, political violence (including demonstrations), criminal activities, and other security incidents often take place without any warning, US citizens are strongly encouraged to maintain a high level of vigilance and practice good situational awareness when traveling overseas", it said.

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