Trump threatens new tariffs on Chinese imports

Alicia Cross
June 22, 2018

"It undermines the interests of the Chinese and American people, the interests of companies and the interests of the people all over the world", state-run Xinhua news agency quoted the spokesperson as saying.

Trump's proposed new tariffs would amount to the latest round of punitive steps in an escalating rift between the world's two largest economies.

"We are likely to see a cold war from economics to other areas", he said.

The White House has accused China of forcing US companies to share advanced technology with Chinese partners as a condition of doing business there.

China "doesn't want a trade war" but has to "fight back strongly", said a Commerce Ministry statement.

Trump announced hefty tariffs on $50 billion of Chinese imports on Friday, laying out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars. China retaliated swiftly by announcing reciprocal tariffs on US products, ranging from soybeans and autos to seafood.

President Donald Trump's protectionist trade policies have led China and the European Union to hit back at new USA tariffs meant to discourage foreign purchases of steel and aluminum.

The planned new wave of tariffs would have to go through a similar process of public consultation and comment as the earlier ones before taking effect.

Initially, 545 United States products valued at $34 billion will be targeted by China, mimicking the Trump administration's tariff rollout.

Trump expressed hope about resolving the ongoing dispute, but pledged: "Canada is not going to take advantage of the United States any longer".

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", MR Trump said in a statement announcing the new action.

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US stock markets fell sharply Tuesday, with investors increasingly nervous about the impact of the escalating fight.

The Dow Jones industrial average lost 292 points, or 1.2 percent.

Within the USA equity market, investors have targeted smaller companies with a domestic focus. Boeing and Caterpillar fell more than 3% apiece.

China's Commerce Ministry on Tuesday criticised the latest threat of tariffs, saying it was an "act of extreme pressure and blackmail that deviates from the consensus reached by both parties after many negotiations, and is a disappointment to the worldwide community".

Some U.S. producers said growing demand for U.S. energy would overcome the impact of China's tariffs just as higher oil prices this year have not slowed the global thirst for oil and natural gas.

China said it would retaliate immediately by slapping duties on American export products, including crude oil, and suspend all previous trade agreements with Trump's administration.

He added he would identify an extra $200 billion of goods - for a possible total of $450 billion, or most Chinese imports - "if China increases its tariffs yet again".

The impact likely would be temporary as US oil becomes less attractive to Chinese buyers.

The moves could start to meaningfully slow US growth, economists warn. USA crude fell 1.6 percent to $64.80 a barrel in NY, and Brent crude, the worldwide standard for oil prices, fell 0.5 percent to $74.94 a barrel in London.

Trade wars are good and easy to win - even if the victory is won at a great cost.

However, many market watchers believe there is still room for compromise, suspecting Trump's announcement was a negotiating tactic to wring faster concessions from Beijing.

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