Trade War Escalates as Trump Pushes for $200 Billion in Tariffs

Posted July 14, 2018

-China trade dispute escalates, Beijing cut its forecast for soybean imports and the Chinese currency fell as worries about fallout from the simmering conflict grew.

China ran a $375 billion goods trade surplus with the United States in 2017. Yet Beijing isn't about to drop its zeal to acquire the technology it sees as crucial to its prosperity.

The latest round of tariffs are subject to a period of consultation that runs until the end of August, meaning the trade friction will continue well into the autumn campaign season for the US midterm elections.

"American families are the ones being punished". China's retaliation equates to billions of new tariffs on US exporters.

China meanwhile said it was "shocked" and warned it would impose countermeasures "to safeguard the core interests of the country and the fundamental interests of the people".

The United States, meanwhile, has lodged 22 WTO complaints against China, accusing the Asian nation of a range of illegal trade practices, including propping up its manufacturing and agricultural sectors with subsidies and effectively stealing the trade secrets of foreign firms.

The Retail Industry Leaders Association, a lobby group representing the largest USA retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'".

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On July 6, the U.S. Customs and Border Protection started to collect duties on $34 billion worth of goods, as outlined in a published list made available by the federal register on April 6.

The new list products would be assessed at 10 per cent if Beijing insists on the retaliatory tariffs announced in June. Donald Trump is now pushing for $200 billion more in tariffs, and this time around, he's targeting consumer goods directly.

For months, the Chinese government has patiently urged the USA administration to stop bullying its trade partners, stop trampling the multilateral trade system, and apply an open mind to achieve win-win.

Concerns about the knock-on effect of the trade war spread on Thursday, with South Korea, Asia's fourth-largest economy, warning that components and materials - "intermediate goods" - used in home appliances, computers and communications devices could be caught in the crossfire.

The United States is already working on a second wave of tariffs on Chinese goods worth $16 billion. The ministry did not offer more details, but Beijing had earlier threatened "comprehensive measures" if more tariffs were imposed. "As a result of China's retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports".

Mr Trump has threatened to put new taxes on nearly everything the U.S. imports from China.

Trump has been receiving support for regulation of US businesses as well as domestic tax cuts from the US Chamber of Commerce but soon after Tuesday's announcement a Chamber spokeswoman states, "Tariffs are taxes, plain and simple".