Upping ante, Trump threatens new tariffs on Chinese imports

23 June, 2018, 13:21 | Author: Kathy Ellis
  • Trump escalates China trade war with extra tariffs

China's commerce ministry said Beijing will fight back with "qualitative" and "quantitative" measures if the United States publishes an additional list of tariffs on Chinese goods.

Gary Cohn, Mr Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt - "historic ingredients for an economic slowdown". "China has been taking out $500 billion a year out of our country and rebuilding China".

U.S. -CHINA TARIFFS: Tariffs mooted by the world's two biggest economies are set to take effect from July 6, bolstering fears of a trade war.

US stock markets are set for a sharply lower open as tensions over trade between the USA and China seem closer to a boil.

China's Commerce Ministry on Tuesday criticized the latest threat of tariffs, saying it was an "act of extreme pressure and blackmail that deviates from the consensus reached by both parties after many negotiations, and is a disappointment to the worldwide community".

US Trade Representative Robert Lighthizer said his office was preparing the proposed tariffs and they would undergo a similar legal process as previous ones, which were subject to a public comment period, a public hearing and some revisions.

The threat had an immediate impact on the market as in NY, the Dow Jones industrial average lost more than 300 points, or about 1.3pc, in early trading on Tuesday.

Sixty-two percent of companies in all industries said they had less favorable market access in China than their Chinese competitors had in Europe.

Germany's DAX lost 1.3 percent to 12,839 and France's CAC 40 shed 1.2 percent to 5,433.

The Business Roundtable, representing companies with more than $7 trillion in annual revenue, said the administration's feud with China "will only make it harder to achieve a fair and level playing field for American companies to compete in China".

After unveiling plans to impose additional tariffs on Chinese goods worth around 50 billion USA dollars, the United States went even further by threatening to identify 200 billion US dollars worth of Chinese products for additional tariffs.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", he said.

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TIT-FOR-TAT On Friday, Trump said he was pushing ahead with a 25 per cent tariff on $50 billion worth of Chinese products, prompting Beijing to respond in kind.

Neither side has yet imposed tariffs on the other in their growing dispute over technology and the US trade gap.

China retaliated by announcing that it too was raising tariffs on $50bn worth of USA exports, particularly from the agricultural sector where it could hurt Washington the most.

The global sell-off came after President Donald Trump threatened to put tariffs on another $400 billion in imports from China, and the Chinese government said it would retaliate.

"This is a trade dispute - nothing more, nothing less", Navarro says.

The Semiconductor Industry Association, which represents major American chipmakers including Intel and Qualcomm, said it was alarmed to find the United States government was considering tariffs on computer chips imported from China.

The 25 percent duties imposed by China go into effect July 6, and cover high-profile USA products such as electric vehicles, soybeans, whiskey, orange juice, lobsters, salmon and cigars.

Later on Friday, China announced its own tariffs on American goods, including a wide range of seafood and agricultural products, many cars and trucks, petrochemicals and an array of medical equipment.

The Department of Commerce said it would impose new import duties on a common alloy aluminium sheet after finding that Chinese firms were selling it in the United States more than 167 per cent below cost. He added that China is a "predatory economic government" that is "long overdue in being tackled", matters that include IP theft and Chinese steel and aluminum flooding the USA market.

The association cited testimony it gave before the USTR in May, stating that tariffs on motor vehicle parts would not help redress intellectual property theft, but only harm USA vehicle parts manufacturers. They noted that China could only levy duties on a total of $100bn-plus of United States products. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.

Trump threatened to continue the economic escalation, saying that if China retaliates against the second round of tariffs, then more would be imposed.

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