United States to impose extra tariffs on $200bn of Chinese imports

Elias Hubbard
July 12, 2018

House Ways and Means Committee chief Kevin Brady, of Texas, warned of "a long, multi-year trade war between the two largest economies in the world that engulfs more and more of the globe". In a statement, it called the USA actions "completely unacceptable".

The Chinese foreign ministry said Washington's threats were "typical bullying" and described the dispute as a "fight between unilateralism and multilateralism".

On Tuesday, US officials issued a list of thousands of Chinese imports the Trump administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium, prompting criticism from some US industry groups.

China gave no details, but it has plenty of options to retaliate that could extend beyond additional tariffs on USA imports.

The Senate intends to vote on Wednesday on a nonbinding measure that would insert provisions requiring Congressional approval of tariffs into water and energy "minibus" spending bills, Senator Jeff Flake (R-Arizona) told Bloomberg.

Financial markets could take a harder fall if China retaliates to the latest volley of USA tariffs, as Beijing has vowed, according to research firm Capital Economics.

The US Chamber of Commerce, which has supported Trump's tax cuts and efforts to reduce regulation of businesses, also criticised the administration's move.

"Tariffs are taxes, plain and simple". Imposing taxes on another $200 billion worth of products will raise the costs of every-day goods for American families, farmers, ranchers, workers, and job creators.

It's now safe to say that a trade war is underway between the United States and China.

At a forum in Beijing, a senior official accused the United States of "damaging the world economic order" and said it would "destroy" trade between the rival powers.

Investors fear an escalating Sino-American trade war could hit global growth and damage sentiment.

An all-out trade war with China could affect a third of all USA imports, data from Deutsche Bank Torsten Slok show. USA crude oil futures CLc1 settled $3.73, or 5.03 percent, lower at $70.38 per barrel.

'It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating, ' it said.

There was a price to be paid by American companies as government policies legislated winners and losers. "China is shocked by the irrational movement of the US".

Meanwhile, farmers hurt by Chinese tariffs on US agricultural exports pose a political risk for Mr. Trump and for Republicans, especially as the November midterm elections loom. "But China's reaction to the USA tariffs could pose a far greater threat to the index in time". Hong Kong's Hang Seng lost more than 1 per cent, as did Japan's Nikkei as the yen received something of a safety bid.

Reflecting those concerns, stocks sold off Wednesday, as the Dow fell 219 points, or 0.9 percent, and the broader S&P 500 and Nasdaq also declined.

The Trump administration on July 6 imposed 25 per cent duties on US$34 billion in Chinese imports, the first time the president has implemented tariffs directly on Beijing after threatening to do so for months.

'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'.

He said his office "will proceed with a transparent and comprehensive public notice and comment process prior to the imposition of final tariffs, as we have for previous tariffs".

Other reports by Click Lancashire

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