Published: Thu, July 12, 2018
Money | By Armando Alvarado

Trump administration threatens tariffs on another $200 billion in Chinese imports

Trump administration threatens tariffs on another $200 billion in Chinese imports

The retaliatory tariffs that China enacted Friday targeted United States cars and major agricultural goods, such as soybeans and meat. Beijing has not yet responded because it doesn't import enough from the U.S. to match the $US200b figure. Also on the list were farm products, seafood, building supplies and certain types of electronics.

On Wednesday, the MSCI's broadest index of Asia-Pacific shares outside Japan was down about 1%, while the main indexes in Hong Kong and Shanghai recovered somewhat after falling more than 2%.

China's Commerce Ministry slammed the latest United States threat as a "totally unacceptable" escalation of their dispute and promised to protect its "core interests". It said Beijing would take unspecified "necessary countermeasures" to protect its "core interests".

China immediately retaliated with duties on the same value of us goods, including soybeans and cars. That would make USA exports more competitive and close the trade deficit.

But the string of announcements come at a time when there has been slowing foreign investment into China and more vociferous complaints about Beijing's market barriers and the difficulty of doing business in the world's second-largest economy.

China has become a key trade partner for US energy exports, and potential tariffs on USA energy goods could hurt US producers and industries.

"Tonight's announcement appears reckless and is not a targeted approach", Senate Finance Chairman Orrin Hatch, a Utah Republican, said in a statement.

On Tuesday, the US Trade Representative's office announced a $200bn list of Chinese goods for possible 10 percent tariffs including fish, apples and burglar alarms.

The latest round of import taxes on Chinese goods has a two month public commentary period and the USA administration is being open about the fact that they expect China to discuss the move leading one to wonder if it will actually be imposed.

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The more it turns up the heat therefore, the more likely the tariffs get implemented as just like the 25 per cent levies on $34 billion of Chinese and USA imports triggered on Friday.

To find out what impact local consumers can expect to feel, MyBroadband asked Efficient Group economist Dawie Roodt about the US-China trade war.

Propaganda authorities have also issued unusually strict rules limiting local media coverage of the trade war because of worries that unrestrained reporting could set off panic and roil its already jittery financial markets, sources within Chinese state media have said. Shares of Advance Auto Parts Inc were down 1.6%, Autozone Inc fell 1.8% and O'Reilly Automotive nearly 2%.

Read the entire Wall Street Journal report here. That number exceeds the total value of items China imports from the United States, and since it can not match Washington dollar for dollar, Chinese officials familiar with the plans told the Journal that China is looking into alternatives.

As a outcome, the Australian dollar fell sharply, down 1.2 per cent to 73.65 USA cents. Copper was down 3 per cent at $6,141.50. Three-month aluminium on the London Metal Exchange lost 1.41% to $US2060.50 a ton. Brent crude fell $2.51 to $76.30 a barrel by 11.30 pm, IST, while United States crude was down $1.74 at $72.37 a barrel.

USA futures are also taking a hit, albeit at a slightly lower level.

Mr Trump criticised North Atlantic Treaty Organisation allies' military spending levels as he began his seven-day tour through Europe - one that starts with the North Atlantic Treaty Organisation summit in Belgium and ends with a talk with Russian President Vladimir Putin in the Finnish capital of Helsinki.

"The $200 billion figure we're looking at is roughly equal to their exports to us", a senior administration official said. "But we will work it out and all countries will be happy".

He said Donald Trump has a challenge ahead. China received more USA crude oil in 2017 than the third- and fourth-largest importers combined, the United Kingdom and the Netherlands.

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