U.S. fires next shot in China trade war

Roman Schwartz
July 11, 2018

The president last month asked the U.S. Trade Representative's office to identify US$200 billion of Chinese goods that could be hit with 10 percent tariffs.

The official said the decision was not final and that the list of Chinese goods would not become final until after the public had a chance to comment.

The move, which was expected, escalates a trade war with China.

The tariff list could be released as soon as Tuesday, and likely this week, the report said.

This builds on 25 per cent tariffs on $US34 billion worth of Chinese imports into the US that took effect at midnight on Friday, and carries out US President Donald Trump's threat to respond to any Chinese retaliation to those taxes.

Administration officials said the tariff fight is aimed at forcing China to stop stealing American intellectual property and to abandon policies that effectively force US companies to surrender their trade secrets in return for access to the Chinese market.

"For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition", U.S. Trade Representative Robert Lighthizer said in announcing the proposed tariffs.

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But China only bought about $135 billion in USA goods past year, meaning it will run out of American products to tax before it matches Trump's latest move.

Some US business groups and senior politicians sharply criticized the latest action, with Senate Finance Committee Chairman Orrin Hatch, a Republican, saying it "appears reckless and is not a targeted approach". These tactics include the outright theft of trade secrets, government subsidies to homegrown tech firms and demands that USA and other foreign companies hand over technology if they want access to China's vast market.

"We encourage companies to optimize the structure of imports, increase imports of soybean, agricultural products, as well as seafood and cars from other countries and regions", said the ministry, explaining that the measures are aimed at mitigating the effects of the trade war with the United States.

Chinese officials are expected to retaliate in other ways, hitting US firms in China with unplanned inspections, delays in approving financial transactions and other administrative headaches.

The U.S.is now considering levying duties on a further $16 billion in Chinese goods, after a public hearing later this month.

Administration officials said they hoped the measures would convince the Chinese government to increase market access for USA companies and address allegations of the theft of intellectual property. But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.

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