US May List Tariffs On $200 Billion More Chinese Products

Elias Hubbard
July 12, 2018

The dollar rose near an 11-month high against the Chinese yuan and the Australian dollar tumbled after the United States said it would slap tariffs on an extra $200 billion of imports from China, sharply escalating tensions between the world's two biggest economies. "Right now, world trade is relatively chaotic".

"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.

"Now, we will need to grapple with new tariffs on an additional US$200 billion worth of imports, which are bound to include even more consumer products and everyday essentials". This has raised concerns that China could retaliate with non-tariff trade measures.

Tuesday's USTR announcement of a possible second round of tariffs came four days after Washington added 25 percent duties on $34 billion of Chinese goods including medical equipment, electronics and factory machinery, and Beijing responded by increasing its own taxes on the same amount of American imports including soybeans and orange juice. "There is no justification for such action", he said in a statement.

The U.S. Trade Representative is taking comments on these proposed tariffs until August 17.

Calling Washington's behavior irrational, Beijing warned that the USA is, in the first instance, hurting itself with protectionist measures and constant attacks on free trade.

The move marked the latest escalation of the ongoing trade war between Washington and Beijing. The move makes good on the president's threat to respond to China's retaliation for the initial US tariffs on $34 billion in Chinese goods, which went into effect on Friday and would eventually place almost half of all Chinese imports under tariffs.

A Commerce Ministry statement said, "It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating". "China has not changed its behaviour - behaviour that puts the future of the USA economy at risk". When Trump first threatened last month to target another $200 billion of Chinese products, Beijing said it would be "forced to strike back hard, and launch comprehensive measures that match the United States move in quantity and quality".

Although it was not a direct reaction to the new move from Trump's administration, the official English-language newspaper China Daily said in an editorial that Beijing had to stand up to Washington.

On Wednesday, the MSCI's broadest index of Asia-Pacific shares outside Japan was down about 1 percent, while the main indexes in Hong Kong and Shanghai recovered somewhat after falling more than 2 percent.

Orrin Hatch, the Republican Senate Finance Chairman, condemned the move as "reckless" and not "targeted", while U.S. stock index futures fell in early Asian trading. This gave USA soybean farmers an opportunity to rush the product out of the country before the trade war kicked off in earnest, but also seriously shifted trade patterns for the crop. "It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokeswoman said.

The news shattered the uneasy calm that had descended on markets and allowed them to regain some of the ground lost in recent months on trade war woes.

According to the US, China uses predatory practices in a push to challenge American technological dominance - and allegedly forces American companies to hand over technology in exchange for access to the US market.

Other reports by Click Lancashire

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