The White House late on Monday announced that it was asking the USTR to draw up a list of $200 billion-worth of Chinese goods to hit with an additional 10% tariff in response to China publishing a list of 545 USA items worth $50bn in export revenue on Friday that it would slap with a 25% tariff. The two sides have been involved in negotiations with China offering to buy $70 billion dollars in US goods.
President Donald Trump’s protectionist trade policies have led China and the European Union to hit back at new US tariffs meant to discourage foreign purchases of steel and aluminum. On Monday, Trump responded with another round of tariffs. “Rather than altering those practices, it is now threatening United States companies, workers and farmers who have done nothing wrong”.
To retaliate for that move, Trump is calling for 10 percent duties on an additional $200 billion in Chinese products.
US stock markets are opening sharply lower Tuesday as tensions over trade between the USA and China seem closer to a boil.
The US leader warned Friday of “additional tariffs” should Beijing hit back with tit-for-tat measures.
“That could have an enormous impact because many of our companies operating in China have significant market share built up over decades”.
In response to China’s efforts to impose retaliatory tariffs, President Trump has asked U.S. trade officials to identify US$200bn worth of Chinese goods for additional tariffs at a rate of 10 per cent.
The White House has accused China of forcing US companies to share advanced technology with Chinese partners as a condition of doing business there. That would leave about $120-billion available for a tariff hike, falling short of Trump’s $200-billion target.
“I always say, “We have rebuilt China”. Trump said he hopes to cut the trade deficit with the increased tariffs.
U.S. Secretary of State Mike Pompeo speaks at an Economic Club of Detroit luncheon in Detroit, Monday, June 18, 2018.
While there are no winners in a trade war, the U.S. is focused on protecting United States technology and sees the tariffs on Chinese tech products as a legitimate action.
In an editorial, the English language China Daily, often used by Beijing to get its message out to the rest of the world, said the United States had failed to honor an agreement on rebalancing trade, referencing a deal stuck in May for China to significantly increase purchases of US goods and services. He added that China is a “predatory economic government” that is “long overdue in being tackled”, matters that include IP theft and Chinese steel and aluminium flooding the USA market. Another 280 or so still need to undergo a public comment period, and will take effect later.
Shares of large USA companies with significant overseas business were hit especially hard.
By contrast, Palmer noted, the United States exported only about $130bn worth of products to China in 2017.
Trump, speaking to a gathering of small business owners in Washington, is railing again against the North American Free Trade Agreement, saying the US can no longer afford to be the “stupid country”. While U.S. markets have taken only the most modest of dips, China’s markets have sold off quickly.
“It was a trade war that put the Great in the Great Depression”.
Meanwhile, Wall Street has met the news of new tariffs with caution, fearing an economic slowdown that could come as a result of a trade war.
Some industries had higher rates of companies reporting they felt compelled to hand over technology, according to the European chamber.