United States proposes tariffs on $200 billion more in Chinese imports

Adjust Comment Print

Responding to the Trump administration's latest plan to slap 10 per cent tariffs on an extra $200-billion worth of Chinese imports, Assistant Commerce Minister Li Chenggang said on Wednesday that China would not close itself to us business.

The new trade frictions sent investors running for cover, with equity markets across Asia tumbling more than 1 per cent.

This action follows tariffs of 25% imposed on $34 billion worth of Chinese goods, made effective July 6; flooring was not included on that list.

More than 6,000 items could be affected - including burglar alarms, auto tyres, handbags, baseball gloves, carpets, toilet paper, dog food, and hundreds of food products.

A Chinese Commerce Ministry statement, issued Wednesday following the Trump administration announcement, said China was "shocked" at the USA plans to levy the 10% tariffs. This has raised concerns that China could retaliate with non-tariff trade measures.

The proposed tariffs come just days after the Trump administration imposed 25 percent tariffs on more than 800 Chinese products worth about $34 billion, citing what it calls China's unfair trade practices and intellectual property theft.Beijing followed suit with an equal amount of levies on US goods.

Stock markets in Shanghai dipped 1.8%, and Hong Kong fell more than 1.4%.

The Dow Jones Industrial Average fell 219.21 points, or 0.88%, to 24,700.45, the S&P 500 lost 19.82 points, or 0.71%, to 2,774.02 and the Nasdaq Composite dropped 42.59 points, or 0.55%, to 7716.61.

The USTR, the federal agency that oversees worldwide trade policy and negotiations, said it was responding to Beijing's decision to retaliate instead of changing its policies.

The US administration late on Tuesday released a huge list of new tariffs on $US200 billion worth of goods from China. The latest list hits items that USA households buy, including electric lamps, apple juice and fish sticks.

The US-China spat is one of several trade fights picked by the protectionist President Donald Trump as his "America First" agenda disrupts trade relations among traditional allies.

Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump's Republican Party, said the announcement "appears reckless and is not a targeted approach".

The National Association of Manufacturers also criticized the USA decision, saying this latest round of tariffs could undermine the economic gains from the administration's tax and regulatory reform policies.

And now China is ready to slap tariffs on American goods like French doors. Imposing taxes on another US$200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators.

The US tech industry and other business groups say they oppose the move even though the administration says the tariffs are to protect the US's technological lead and put pressure on China to stop bad practices. In fact, China is America's second-largest crude oil customer after Canada and is also one of the biggest importers of USA propane and liquefied natural gas (LNG).

Experts have said that the outlook of the trade war depends on how China responds to the tariffs on its imports.

"We will be losing market share".

"In part because they have only limited ammunition and in part because it's still early in the process on the USA side", Kuijs said.