China Trade wars continue as China vows retaliation

Gladys Abbott
August 4, 2018

Wang's comments came after the U.S. Trade Representative announced Wednesday it was considering raising import duties on $200 billion of Chinese goods by 25 percent instead of the previously planned 10 percent.

"The increase in the possible rate of the additional duty is meant to provide the Administration with additional options to encourage China to change its harmful policies and behavior", Lighthizer wrote.

The Chinese government said Friday that it would impose duties of 25%, 20%, 10% and 5% on the products if the Trump administration follows through on threats to tax $200 billion of Chinese goods.

"The increase in the possible rate of the additional duty is meant to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens", he said.

China has announced retaliatory tariffs on $US60 billion ($81b) worth of United States goods ranging from liquefied natural gas (LNG) to some aircraft and warned of further measures, signalling it will not back down in a protracted trade war with Washington.

The US imposed tariffs of 25 percent on $34 billion of Chinese products earlier this month, with plans to add another $16 billion of imports on Tuesday.

Last month, Trump threatened to impose tariffs on all goods imported from China.

The US and China implemented tariffs on $46 billion worth of each others' goods in July.

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Trump set his sights on China during the 2016 presidential campaign and has followed through during his presidency with a protectionist strategy that he says is aimed at strengthening USA companies and boosting jobs at home.

The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.

The ministers urged China and ASEAN to reach the Regional Comprehensive Economic Partnership in the shortest time to facilitate free trade and regional economic integration, safeguard multilateralism and rules-based multilateral trading regime.

"We said before that this round of tariffs amounted to doubling down on the recklessness of imposing trade policy that will hurt USA families and workers more than they will hurt China", said Matthew Shay, president of the National Retail Federation. China responded with tariffs on $34 billion in USA goods, including a wide range of agricultural products. Beijing retaliated with matching tariffs on the same amount of United States exports to China.

Chinese Foreign Ministry Spokesperson Geng Shuang said on Thursday that China will advise the USA to change its attitude, stop making false accusations, and return to the land of reason. After the earlier tariffs $34 billion of USA goods, about $120 billion is available for retaliation.

China's coal demand for power generation has been rising and domestic output gains haven't been able to keep pace, meaning a draw on the seaborne market, which is already supply constrained, with major exporters Australia and Indonesia unable to boost output. "The cost increases will be passed on to customers, so it will affect most Americans' pocketbooks". Administration officials are exploring an additional $200 billion of goods on which tariffs might be imposed.

The US Trade Representative's office initially had set a deadline for final public comments on the 10 per cent proposed tariffs to be filed by August 30, with public hearings scheduled for Aug.20-23.

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