China: Trump forces its hand, will retaliate against new U.S. tariffs

China: Trump forces its hand, will retaliate against new U.S. tariffs

China: Trump forces its hand, will retaliate against new U.S. tariffs

According to a preliminary list of goods released by the US Trade Representative's office in July, in just a few examples, Washington is considering putting tariffs on roughly $40 billion in Chinese-made voice data receivers, computer memory modules, automatic data processors, and accessories for office equipment such as copiers and bank note dispensers - instantly making widely used goods more expensive.

China's Finance Ministry said its tariff increases are aimed at curbing "trade friction" and the "unilateralism and protectionism of the United States".

On Monday, President Trump announced tariffs on $200 billion worth of Chinese imports.

"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower United States growth and competitiveness and higher prices for U.S. consumers", Apple said in a letter commenting on the proposal.

At the same time, the proportion of Americans who say free trade has helped the US climbed in 2018 relative to past years, according to NBC/WSJ polls. He also threatened to impose taxes on virtually all of the remaining goods imported from China, amounting to $267 billion a year. The good news was that officials changed the list of items affected by tariffs on goods imported from China to exclude smartwatches and other Bluetooth devices. Still, American consumers could start feeling the cost of the tariffs for everyday goods, as the latest move brings all Chinese imports subject to a new tariff to $250 billion, roughly half of China's shipments to the U.S. previous year. The widely voiced view among professional investors has been that the escalation of tariffs and tough trade rhetoric have been tactics aimed ultimately at lowering unfair trade barriers and protecting USA intellectual property.

After the administration announced a plan to slap 10 per cent tariffs on US$200 billion of Chinese goods, increasing the duties to 25 per cent, effective January 1, the head of the US Chamber of Commerce said such action ran counter to the pro-growth policies on which the US economy operated.

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"We stand ready to negotiate with China anytime, if they are willing to engage in serious talks", Kudlow said at the Economic Club of NY.

Apple shares fell 2.6 per cent, amid concerns it might be caught in the middle of an escalating trade war. That will result in lower demand for Chinese imports, creating a bargaining tool in trade negotiations.

Beijing has retaliated in kind, but some analysts and American businesses are concerned it could resort to other measures such as pressuring USA companies operating in China.

Any escalation is likely to involve its currency or making it harder for US companies to operate in China, but the immediate dent on the economic picture is likely to be small, he said.

President Trump's controversial trade war with China is heating up.

"China's scope to retaliate is surprisingly limited however, especially since the outbreak of swine flu, which will anyway push up CPI inflation", Beamish said, referring to the deadly swine fever strain that is seen impacting Chinese pork prices.

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Economists at UBS Group AG say even a 10 percent tariff would slow the U.S. economy in the fourth quarter by enough to stop the Federal Reserve hiking interest rates again in December.

"But, so far, China has been unwilling to change its practices", he said. China's Ministry of Commerce said on Tuesday that it had filed a complaint with the WTO following Washington's latest tariff action.

It was not clear what open statements by China - if any - Trump was referring to.

US Treasury Secretary Steven Mnuchin last week invited top Chinese officials to a new round of talks, but nothing has been scheduled as yet.

In the first two rounds of tariffs, the Trump administration took care to try to spare American consumers from the direct impact of the import taxes.

USA companies have already said they are anxious about the effect of higher costs on their businesses.

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