China slaps additional tariffs on $50 billion worth of USA goods

China on Saturday announced its decision to impose additional tariffs on American products worth $50 billion, in response to the United States’ declaration of levying 25 per cent duties on Chinese goods, a day earlier.

In our news wrap Friday, the Trump administration hit China with punishing new tariffs, the latest escalation in a trade battle. Trump said that with the increased tariffs he hopes to cut the trade deficit with China by $100 billion.

“While the end game is a compromise trade deal that meets US demands for stronger Chinese protection of intellectual property rights, the road to a trade deal has become very ugly”, said Rajiv Biswas, APAC chief economist at IHS Markit in Singapore. He has previously put tariffs on washing machines, solar products, steel and aluminum – that the US imports from different parts of the world.

If Trump does that, and China again retaliates in kind, that could mean that nearly all USA goods exported to China would face new tariffs in the near future.

A staff member walks past U.S. and Chinese flags placed for a joint news conference by U.S. Secretary of State Mike Pompeo and Chinese Foreign Minister Wang Yi at the Great Hall of the People in Beijing, China June 14, 2018. “The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China”.

“We must take strong defensive actions to protect America’s leadership in technology and innovation”, Lighthizer said.

The Chinese announcement is the latest volley in a trade dispute between China and the US that has been escalating for months. “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. During an impromptu appearance on the White House North Lawn, the president hailed his “very big tariffs” on China. “His fundamental commitment to the “deplorables” on the campaign trail was that he was going to bring manufacturing jobs back, particularly from Asia”.

The Chinese have threatened to counterpunch.

Affected US products will include crude oil, natural gas, coal and some refined oil products.

Any U.S. business that buys products from China that are covered by the new tariffs will face a tax on those products. “Those are crown jewels for this country”, Trump said on “Fox & Friends”. Ball-bearing sales are significant: China sold $349 million worth to the U.S.in 2017, as well as $25.6 million worth of copper winding wire used as insulated electric conductors.

“There is still a desire on both sides to remove both the ZTE and Qualcomm [deals] from the already complex equation, but political pressures on both sides, and a serious escalatory spiral in the relationship, could spell trouble for both deals”, Triolo said. “If you look back at President Trump’s history, he’s been wildly successful negotiating as a businessman”.

China’s announcement could have major ramifications for the US seafood industry and for the economy of ME, which is home to most of the country’s lobster fishery. The ministry did not detail specifically what goods China will penalize.

Most of all, the USA tariffs are a response to China’s attempts to supplant US technological dominance, including outright theft of trade secrets and its requirement that USA companies share technology in exchange for access to the Chinese market.

By June 30, the administration is expected to finish writing rules to restrict China’s ability to invest in US technology.