Trade war Round 2? United States threatens new tariffs on China

Remigio Civitarese
Luglio 11, 2018

"We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy", he said in a statement. China responded with levies of its own, targeting $34 billion in US products such as pork and whiskey.

Some Chinese suppliers said they planned to start negotiating soon with their American buyers over how to handle the proposed tariff and who would absorb the costs of the levy.

Officials later issued a list of thousands of Chinese products the White House wants to hit with new tariffs, including hundreds of food products as well as tobacco, chemicals and coal. They warned tariffs on imports raise consumer prices and expose US farmers and manufacturers to retaliation.

The US administration late on Tuesday released a huge list of new products that tariffs on $US200 billion worth of goods from China will be levied against. "There is no justification for such action".

The U.S. Trade Representative is taking comments on these proposed tariffs until August 17.

However, in a statement this morning the Chinese ministry of commerce hit back, saying: "China is shocked by USA behaviour".

It is the latest shot in a spiralling dispute between the world's two largest economies.

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

Li Yong, a senior fellow at the China Association of International Trade in Beijing said one retaliatory tactic China could deploy would be a bigger push to attract foreign investment, just not from the U.S.

United States officials argue they had no choice but to move forward on the new tariffs after China failed to respond to their concerns over unfair trade practices and Beijing's abuse of American intellectual property, according to two senior officials who spoke to reporters.

"As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China's unfair trade practices and to China opening its market to USA goods and services", he added.

Beijing imposed its tariffs on Friday in retaliation for U.S. tariffs on Chinese goods.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 6, 2018.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, responded to Lighthizer's announcement with dismay.

On Wednesday, the MSCI's broadest index of Asia-Pacific shares outside Japan was down about 1 percent, while the main indexes in Hong Kong and Shanghai recovered somewhat after falling more than 2 percent.

The US Chamber of Commerce, which has supported Trump's tax cuts and efforts to reduce regulation of businesses, also criticised the administration's move.

Analysts say the Chinese government could target trade in services between the two countries, such as tourism and education, or seek to make life hard for big American companies operating in China. While earlier tariffs were expected to have only a limited impact, economists warn a full-blow trade war could derail the strongest economic upswing in years.

The US complains that China uses predatory practices in a push to challenge American technological dominance.

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