China Retaliates for $200 Billion in US Tariffs

Alicia Cross
September 19, 2018

In the statement announcing the new tariffs, Trump warned that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

Still, American consumers could start feeling the cost of the tariffs for everyday goods, as the latest move brings all Chinese imports subject to a new tariff to $250 billion, roughly half of China's shipments to the United States past year.

If China retaliates for the latest USA duties, Trump threatened Monday to add a further $267 billion in Chinese imports to the target list.

"China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers due to their loyalty to me", Trump wrote on Twitter. "What China does not understand is that these people are great patriots and fully understand that".

Beijing had previously threatened to impose tariffs of between 5% and 25% on United States products such as meat, coffee, furniture and auto parts - if the Trump administration went ahead with its plan to target $200 billion of Chinese goods.

The administration's proposal for the tariffs on US$200 billion (S$247 billion) of products drew protest from technology companies earlier this year, but the final list of taxed devices described by the official avoids many big consumer brand names and products.

"The U.S. economy runs on pro-growth policies, but that's not what tariffs on 200 billion dollars worth of Chinese goods deliver", he said.

The U.S. duties targeted Chinese goods Washington says have benefited from improper industrial policies.

The Information Technology Industry Council, a business body representing America's tech companies that are heavily dependent on China trade, called the new tariffs "reckless".

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The officials said China had been given "chance after chance" to change the trade practices considered unfair to USA businesses, but "have remained obdurate". Some companies are looking to move out of China to dodge the tariffs, said Ted Murphy, a partner at the Baker McKenzie law firm. No items were added, the officials said.

US Treasury Secretary Steven Mnuchin invited top Chinese officials to a new round of discussions last week, but no meeting has been scheduled.

President Donald Trump is sharply escalating the American trade war with China. "We hope that China will come to the table and address the concerns we have raised".

Chinese imports from the United States grew by nearly 500 percent over the past five years, such that as of 2017 Chinese buyers accounted for almost one in every five dollars in U.S. export revenue.

"The tariffs could be an excuse, but what China is really looking for is a signal from the United States that President Trump will talk to them directly". The action would bring the total amount of Chinese products subject to duties to $250 billion, roughly half of the amount the USA imported from that country in 2017.

At the root of the trade war are USA complaints about China's plans to try to overtake US technological supremacy.

USA companies have already said they are anxious about the effect of higher costs on their businesses. "I think that kind of tactic is not going to work with China", Fang Xinghai, vice chairman of China's securities regulator, said at a conference in the port city of Tianjin.

"Now is the time for talks-not just tariffs-and manufacturers have laid out a blueprint to reset the US-China commercial relationship that will result in ending China's unfair and anti-competitive behavior", Jay Timmons, NAM's president and CEO, said. "Since the USA production apparatus is not geared towards producing most goods imported from China, import substitution would not be a readily available solution".

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