China-US trade standoff heats up again

Muriel Colon
June 15, 2018

US President Donald Trump on Friday was due to unveil a final list of Chinese imports that would face punishing tariffs, fanning fears of a trade war as Beijing warned that it could swiftly strike back.

Donald Trump has announced $50bn in tariffs the U.S. will levy on China, escalating trade tensions a day after Beijing officials warned it was preparing to retaliate.

Yang, also director of the Office of the Foreign Affairs Commission of the CPC Central Committee, said a healthy and stable development of China-U.S. relations is in the fundamental interests of both peoples.

Following the latest decision by Trump, Congresswoman Rosa DeLauro said tariffs must be seen as one tool among many the USA could use to hold bad actors like China accountable and bring the Chinese government to the table to secure a more favourable balance of trade.

Retaliatory tariffs imposed by China would not only directly affect America's producers, but also tangential industries that support agriculture, a concern that is pressing among members of the Association of Equipment Manufacturers.

A Reuters analysis of U.S. Census Bureau import data in April showed that there were about 7,600 consumer and industrial goods still available for tariffs with a combined value of $101 billion in which China accounts for 40 per cent or less of USA imports.

Trump has already slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world's two biggest economies. The U.S. tariffs are designed specifically to punish China for forcing American companies to hand over technology in exchange for access to the Chinese market.

"This includes goods related to China's Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the United States and many other countries", the president said in the statement.

"There's no question, that to get to $100 billion you're going to hit consumer products coming in from China", a person briefed by Commerce Secretary Wilbur Ross told Reuters.

The decision stems from the conclusions of a Section 301 investigation launched in August that found that China's theft of intellectual property is costing the US economy billions of dollars. "Those are all historic ingredients for an economic slowdown", Gary Cohn, Trump's former top economic adviser, said at an event sponsored by The Washington Post.

A White House spokeswoman confirmed that Trump has made a decision about the tariffs, but declined to say what the decision is.

The countries said in a joint statement that China would "significantly increase" purchases of USA agricultural and energy products to reduce the trade imbalance, a top Trump administration demand. "This situation is no longer sustainable".

Administration officials have been targeting products where China provides less than a third of total United States imports to minimize the effect on consumers.

Spain's newly appointed agricultural minister, Luis Planas, also opposed the tariff's impact, saying it was unjust.

The US president has said that he wants them to be imposed by the end of the month. But if the president follows through on all the duties he's threatened, including the tariffs against China, U.S. inflation could accelerate by 15 basis points, according to Goldman Sachs. So far, Trump has yet to signal any interest in backing away.

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