China threatens new tariffs on $60bn worth of U.S. goods

Roman Schwartz
August 8, 2018

U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping on November 9, 2017, in Beijing.

The yuan extended gains following a rally triggered by a surprise China central bank move to make it more expensive to bet against the currency. "China is not delivering, OK?"

Trump's tariffs target goods the White House says benefit from industrial policies such as "Made in China 2025", which calls for developing Chinese competitors in robotic, artificial intelligence and other fields.

The United States alleges that China steals usa corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America's expense.

The Twitter posts came one day after China vowed to impose steep tariffs on $60 billion in us exports in retaliation to large tariffs the Trump is considering on $200 billion in Chinese exports.

He also said China was "for the first time doing poorly against us".

The retaliation stands to further inflame tensions between the world's two biggest economies and echoes China's response to the previous round of tariffs which took effect last month. "Even if the trade war escalates, China would rather lift the 25 percent tariffs to 50 percent, instead of imposing any tariffs on integrated circuits or big airplanes", according to Larry Hu, head of China economics at Macquarie Securities Ltd.in Hong Kong.

"The U.S.is in a better position to ride through the tariff concerns because of a strong economy", said Sung Won Sohn, chief economist at SS Economics in Los Angeles.

Trump has threatened tariffs on over $500 billion in Chinese goods, covering virtually all US imports from China.

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President Donald Trump in June asked U.S. Trade Representative Robert E. Lighthizer to draft a plan for a 10 percent tariff on $200 billion in Chinese imports.

The highest penalties in Friday's list would hit honey, vegetables, mushrooms and other farm goods, targeting areas that supported Trump in the 2016 election.

The new list includes products as varied as snow blowers and 3-D printers, suggesting Chinese authorities are struggling to find enough imports their own economy can do without.

Beijing's earlier round of tariffs appeared created to minimize the impact on the Chinese economy by targeting soybeans, whiskey and other goods available from Brazil, Australia and other suppliers. But the tariffs are essentially taxes on American businesses (and consumers), not on foreign governments. He told trade officials this week to consider raising that to 25 per cent.

Yet while the Chinese public and private sectors invest in one another based on the principles of the cyclically prosperous market socialist model, the USA is now being forced to subsidise (aka pay) its own farmers whose industry has been partly stagnated during the early stages of the trade war on China.

US companies are putting in place measures to cushion the impact of the trade row, including price hikes, and a number of companies - from industrial firms to home furnishers and toymakers - have said they will move some sourcing and manufacturing outside of China.

China proposed a 25% tariff on imports of copper ore and concentrate from the U.S., which shipped about 70 000 tons to the country past year.

Trump then threatened to slap a 10% tariff on another $200 billion worth of Chinese goods, again leading to a counter-threat from Beijing.

The threat comes as the US has increased rhetoric about the dispute.

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