US may list tariffs on $200 billion more Chinese products

Posted July 11, 2018

President Donald Trump has threatened higher tariffs on more than $500 billion of goods, or almost all of China's annual exports to the United States.

"We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy".

"The outburst of large-scale mutual levying of tariffs between China and the United States will inevitably destroy Sino-US trade", assistant minister of commerce Li Chenggang told a forum in Beijing. Stock markets in Shanghai dipped 1.8%, and Hong Kong fell more than 1.4%.

The US listed $200bn (£150bn) worth of additional products it intends to place tariffs on as soon as September.

The S&P 500 and Dow futures dropped 1%, indicating Wall Street would open lower, while Japan's Nikkei declined 1.5%. The Republican chairman of the U-S Senate Finance Committee says the move is reckless.

"Tariffs are taxes, plain and simple. It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokesperson said. China imported U.S. goods worth $130 billion a year ago and Friday's tariff hike hit $34 billion of that, with another $16 billion cited for a possible increase.

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

Investors fear an escalating trade war between the world's two biggest economies could hit global growth and damage sentiment.

In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said that the latest USA proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the United States in the first half of this year.

"Tariffs on $US200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families", said Scott Lincicome, a trade lawyer and senior policy analyst for the group Republicans Fighting Tariffs.

China's exports have mushroomed since it joined the World Trade Organisation in 2001, making it the world's second-largest economy and prompting widening criticism in recent years from trading partners that it has unfairly used global trade rules to its advantage. "We believe the U.S. measures interfere with economic globalization and damage the world economic order".

"China has no option but to fight fire with fire".