Trump proposes raising tariffs to 25% on $200 billion of Chinese imports

Daniel Fowler
August 4, 2018

In early July, the USA government imposed 25 per cent tariffs on an initial $34 billion of Chinese imports.

The threats and counterthreats have stirred increasing unease from US business and farm groups, which argue that they are the ones losing money and business based on all the new restrictions.

It's the same story for liquefied natural gas (LNG), with only one USA cargo booked for arrival in August, and it departed the Gulf of Mexico on July 1, before much of the current escalation in the trade dispute.

China's Commerce Ministry said in a seperate statement Beijing's new set of proposed import tariffs on United States goods were rational and restrained.

China's finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, ranging from five to 25 per cent.

Officials however downplayed suggestions the move was meant to compensate for the recent decline in the value of the Chinese currency, which have threatened to take much of the sting out of Trump's tariffs by making the imports cheaper.

China is trying to seek an "equal" position in future talks with the U.S. with today's retaliation announcement, said Gai Xinzhe, analyst at the Bank of China's Institute of International Finance in Beijing.

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China immediately vowed to retaliate though at the same time urged the United States to act rationally and return to talks to resolve the dispute.

It would represent a ramping up of pressure over Washington's trade standoff with Beijing.

The Chinese government said Friday that it would impose duties of 25%, 20%, 10% and 5% on the products if the Trump administration follows through on threats to tax $200 billion of Chinese goods.

The higher tariff rate, if implemented, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of US tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

The ministers urged China and ASEAN to reach the Regional Comprehensive Economic Partnership in the shortest time to facilitate free trade and regional economic integration, safeguard multilateralism and rules-based multilateral trading regime. After the earlier tariffs $34 billion of US goods, about $120 billion is available for retaliation. "If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate right", Chinese Foreign Ministry spokesman Geng Shuang said in a press conference Wednesday. Beijing responded to news reports on Tuesday about the planned tariff increase by cautioning the USA against "blackmailing and pressuring" and it vowed to strike back at every escalation. "The cost increases will be passed on to customers, so it will affect most Americans pocketbooks".

The United States may jack up the tariff rate on the next $200 billion in Chinese imports it plans to target as it pressures Beijing to reform its trade practices, USA officials said Wednesday. He also has threatened a further round of tariffs on $300 billion of Chinese goods.

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