USA threatens to impose fresh tariffs on China

Daniel Fowler
July 12, 2018

South Korea's trade ministry said in a statement that the trade war could be "prolonged and spread", adding that it would prepare responses and scenarios to cope with the economic impact of the trade row.

"This is totally unacceptable", the statement said. "But China's reaction to the U.S. tariffs could pose a far greater threat to the index in time".

The Trump administration has published a preliminary list of additional Chinese products that could be targeted with tariffs in the escalating trade war between the world's two biggest economies.

On Tuesday, the US Trade Representative's office announced a $200bn list of Chinese goods for possible 10 percent tariffs including fish, apples and burglar alarms.

But Tuesday's list includes food and agricultural products, handbags, hats and furniture - a group of items that, by themselves, account for almost one-quarter of the $200 billion in Chinese goods that would be subject to the new proposed tariffs, according to data compiled by trade research firm Panjiva. Since then, the president has said his administration could impose duties on virtually all Chinese imports into the U.S.

The European Union Chamber of Commerce in China said this week its member companies are rearranging their trade shipments to ensure any bound for the United States don't pass through China.

"Companies in both countries will suffer losses".

"It looks like the USA just took the scale of the trade frictions to another level", Li said at a forum in Beijing. "We believe the USA measures interfere with economic globalisation and damage the world economic order".

Opponents have been quick to voice their dissent with Trump's decision to escalate the already white-hot trade dispute between the United States and China.

Beijing's commitment to its ongoing deleveraging campaign means that tight credit conditions will continue, Yan said. "It has to resolutely fight back while taking proper measures to help minimise the cost to domestic enterprises and further open up its economy to global investors", it said.

In a statement US trade representative Robert Lighthizer said these new additional tariffs are a result of "China's retaliation and failure to change its practices" after the first round of tariffs.

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"Unfortunately, China has not changed its behavior".

As the U.S. -China trade spat turns into a full-blown war with tariffs and retaliatory tariffs and threats of further tariffs, U.S. energy exports to China may suffer if Beijing follows through with its threat to slap tariffs on U.S. oil and oil product imports. "There is no justification for such action". This will allow the two countries enough time to settle their high-stakes trade dispute through negotiations.

The move comes only days after the US imposed $34 billion worth of tariffs on goods imported from Beijing.

The National Association of Manufacturers also criticized the US decision, saying this latest round of tariffs could undermine the economic gains from the administration's tax and regulatory reform policies.

"Tariffs are taxes, plain and simple".

Trump has recently introduced tariffs on $34 billion worth of Chinese products and, while hundreds of products have been affected, certain goods were conveniently spared from this enactment - including the products made for Ivanka's internationally manufactured fashion brand. Those nations also have retaliated.

The Retail Industry Leaders Association, a lobby group representing the largest USA retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'. But more tariffs like these will punish America's manufacturing workers - and could undermine our hard-won gains thanks to tax and regulatory reform".

China's exports have mushroomed since it joined the World Trade Organisation in 2001, making it the world's second-largest economy and prompting widening criticism in recent years from trading partners that it has unfairly used global trade rules to its advantage.

"While there is now frighteningly little bilateral discussion taking place, increased domestic opposition in the United States to tariffs would make such talks more likely", wrote Louis Kuijs, head of Asia economics at Oxford Economics, in a research report.

"This is going to drag on until they can all come to the table and agree to even the playing field".

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