China to impose additional tariffs on $16B worth of USA goods

Roman Schwartz
August 9, 2018

Still, the administration's hard-line stance on China is stirring doubts among congressional Republicans and business leaders, who fear it may rupture profitable commercial relations. But officials have threatened to retaliate in other ways, like increasing the rate of tariffs on additional American imports.

"Their plan may not be to get China to cry uncle".

China has repeatedly warned it will strike back against any further punitive measures by Trump, saying the United States is threatening the global free trade order with its protectionism.

The US had already levied 25 per cent duties on US$34 billion in Chinese goods on July 6, prompting swift in-kind retaliation from Beijing.

Beijing has called on U.S. officials to be "cool headed", but has warned it will retaliate against any tariffs with its own measures. The step brought the total worth of Chinese goods facing a 25 percent tariff to $50 billion. "That's going to be the new reality".

"We're not yet past the point of no return but we're edging closer to it", said Wang Tao, head of China economic research at UBS AG in Hong Kong. The move appears to wreck the nascent trade deal. Over the weekend, Trump told a rally he holds the advantage over China, adding playing hardball on trade is "my thing".

Trump has claimed in recent tweets that "tariffs are working far better than anyone ever anticipated", linking them to a downturn that has shaved almost a quarter from the value of Chinese stocks since late January.

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July figures showed the US' trade deficit with China decrease only slightly. For instance, the major complaint is about the theft of U.S. intellectual property by Chinese firms. China's exports to the United States fell by 2.5 percent to $41.5 billion month-on-month, while imports of USA goods plunged 1.5 percent to $13.4 billion, according to data from General Administration of Customs on Wednesday, as quoted by the media.

"There are only two hard outcomes so far and China's winning 2-0", Moon said. It would likely have to impose penalties on USA companies doing business in China to make up the difference.

A Chinese Ministry of Commerce spokesperson wrote in a brief statement on Wednesday that the United States action was "once again overriding domestic law and worldwide law", labelling it "a very unreasonable practice".

"We have made the case to the [Trump] administration, in the strongest possible terms, that tariffs imposed on semiconductors imported from China will hurt America's chipmakers, not China's, and will do nothing to stop China's problematic and discriminatory trade practices", SIA's chief executive John Neuffer said. The list is heavy on industrial products such as steam turbines and iron girders. Analysts had forecast 10 per cent.

China has threatened to retaliate on any additional United States tariffs tit-for-tat.

But the Chinese government can employ other tools if the conflict continues.

"Certain people go against the tide for their own private ends and go against morality; the barrier of tariffs wantonly rise, and the stick of hegemony is raised all around", the commentary said.

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