Published: Wed, July 11, 2018
People | By Leon Thompson

Trump preparing additional tariffs on $200B in Chinese goods

Trump had previously warned he would hit a total of $450 billion in Chinese goods, which essentially accounts for all the country's US-bound exports, citing its unfair practices and intellectual property theft.

The U.S. has also placed duties on steel and aluminum from Canada, Mexico, and the European Union, who in turn have responded with retaliatory measures. It stems from Washington's complaint that Beijing steals or pressures companies to hand over technology and worries that plans for state-led development of Chinese champions in robots and other fields might erode American industrial leadership.

"Now, we will need to grapple with new tariffs on an additional US$200 billion worth of imports, which are bound to include even more consumer products and everyday essentials". Rather than address our legitimate concerns, China has begun to retaliate against USA products.

On Friday, the United States imposed 25-percent tariffs on around $34 billion in Chinese goods, sparking an immediate dollar-for-dollar retaliation from Beijing.

The retaliatory tariffs that China enacted Friday targeted U.S. cars and major agricultural goods, such as soybeans and meat.

"It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating", said a Commerce Ministry statement.

The move is a major escalation in a brewing trade war between the world's two largest economies. "The US upped the stakes in the trade war with China, sending equity markets tumbling, as risk off prevails", Jasper Lawler, head of research at London Capital Group wrote in an email. Both governments have raised tariffs on $34 billion worth of each other's goods and already said they are considering additional charges on another $16 billion. "China has not changed its behavior - behaviour that puts the future of the USA economy at risk".

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Trump has said he may ultimately impose tariffs on more than US$500 billion worth of Chinese goods - roughly the total amount of United States imports from China past year.

On Wednesday, China's main stock index lost 1.8 percent and Japan's market benchmark fell 1.1 percent.

The U.S. Chamber of Commerce has supported Trump's domestic tax cuts and efforts to reduce regulation of businesses, but does not back Trump's aggressive tariff policies. Hours later, China's Commerce Ministry said the US tariffs were "totally unacceptable" and would force the country retaliate, without saying how.

China's commerce ministry said it was "shocked" and would complain to the World Trade Organisation, but did not immediately say how it would retaliate. But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.

Trump's latest move took the wind out of investors' sails largely because the central scenario for many in the markets is that Washington will eventually step back from the escalating row and settle for some sort of compromise.

Senate Finance Committee chair Orrin Hatch (R-Utah) also took aim at the announced list, saying it "appears reckless and is not a targeted approach".

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