Published: Thu, July 12, 2018
Worldwide | By Gretchen Simon

China vows retaliation over U.S. tariffs

China vows retaliation over U.S. tariffs

The U.S. Trade Representative announced Tuesday a possible second round of tariff hikes targeting a $200 billion USA list of Chinese goods ranging from burglar alarms to mackerel.

It also includes consumer goods ranging from auto tyres, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

"This is an appropriate response", Robert Lighthizer, the USA trade representative, insisted last night.

The proposed new round of U.S. tariffs mark a sharp escalation in a trade war between the world's two largest economies, which each began levying 25 per cent tariffs on US$34 billion worth of goods against the other on July 6, with tariffs on another US$16 billion in goods on the cards.

This builds on 25 per cent tariffs on $US34 billion worth of Chinese imports into the US that took effect at midnight on Friday, and carries out US President Donald Trump's threat to respond to any Chinese retaliation to those taxes.

The Trump administration said the new levies are a response to China's decision to retaliate against the first round of USA tariffs.

China's government has criticised the latest U.S. threat of a tariff hike as "totally unacceptable" and vowed to retaliate in their escalating trade war. They warned tariffs on imports raise consumer prices and expose United States farmers and manufacturers to retaliation. President Trump had warned China that if the country retaliated to those tariffs, he would impose additional ones; China did, quickly adding tariffs to more than 500 different American imports.

Unfortunately for markets, no end is in sight, with further retaliatory levies nearly certain to be enacted by China in the coming days or weeks.

The USTR said the latest action was in response to Beijing's failure to change its policies and its retaliatory duties.

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"Although I have supported the administration's targeted efforts to combat China's technology transfer regime, tonight's announcement appears reckless and is not a targeted approach", said Sen.

China bought $130 billion of US goods previous year.

The administration said the new levies were a response to China's decision to retaliate against the first round of United States tariffs.

The abrupt escalation is "totally unacceptable", said a Commerce Ministry statement.

The tariffs will not be imposed until after a two-month period of public comment on the proposed list.

The chairman of the Senate Judiciary Committee appeared on CNN's "New Day" Wednesday morning and told Alysin Camerota that recent Chinese tariffs targeting USA exports of soybeans and corn had a profound effect on his state.

"Concerns over trade and trade wars are really having an adverse effect, less so on the US markets than the global markets, but it is certainly taking a bite". They criticize Trump's tactics but share USA complaints about Beijing's industrial policies. Hong Kong's main index shed 1.3 per cent.

"Unfortunately the markets haven't come to grips with the current levels of trade policies and tariffs", said Art Hogan, chief market strategist at B. Riley FBR in NY.

Stock markets in Asia fell sharply during early trading on Wednesday amid the escalating trade tension between the two economic giants.

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