USA imposes new $200 billion tariffs on China

Gladys Abbott
September 18, 2018

The Trump administration said Monday that tariffs would start at 10 percent next week and increase to 25 percent starting January 1.

Trump also threatened to add tariffs on about $267 billion of additional imports if China retaliates against US farmers or other industries.

U.S. President Donald Trump boasted about the power of taxing imports Monday and warned that countries that do not agree to his trade demands will be "tariffed", escalating tensions as crucial negotiations loom with China and Canada.

By expanding the list to US$200 billion (NZ$304 billion) of Chinese imports, Trump risks spreading the pain to ordinary households.

Trump has demanded that China cut its $375bn trade surplus with the United States, end policies aimed at acquiring USA technologies and intellectual property, and roll back high-tech industrial subsidies.

China retaliated against the first round of US tariffs, which were applied mostly to Chinese technology imports, with its own $50 billion of tariffs, primarily on USA agricultural goods.

Chinese authorities have yet to confirm what steps aside from retaliatory tariffs they might take.

"My administration will not remain idle while those interests are under attack".

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After a public comment period, the administration said Monday that it had withdrawn some items from its preliminary list of US$200 billion (NZ$304 billion) in Chinese imports to be taxed, including child-safety products like bicycle helmets.

The duties already levied on $50 billion worth of Chinese goods followed a study on China's intellectual property practices released earlier this year. "Nowadays economic and trade relations between China and the United States are so closely connected that they will not be easily broken by unilateral hegemony", China's Global Times warned.

Other officials who advise the country's leaders are suggesting China impose limits on the sale of parts and supplies needed by US businesses, using "export restraints" to threaten their supply chains. Even the 10-percent tariff is a reduction in and of itself - early reports indicated that the administration was considering a 25-percent tariff.

Trump also has complained about America's massive trade deficit - $336 billion a year ago - with China, its biggest trading partner.

"What you see around the world are our allies hedging against the United States for the first time since World War II", Barshefsky said, adding that US-friendly countries were hastily forming trading blocs with other nations independent of the US.

"It will be a lot of money coming into the coffers of the United States of America", the president said at a Monday White House event, before officially announcing the additional tariffs. But Trump quickly backed away from the truce.

Trump's tariffs on China raise costs and create uncertainty for companies that have built supply chains that span the Pacific Ocean.

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