Economy

China warns U.S. over additional tariffs on $200 billion of goods

China warns U.S. over additional tariffs on $200 billion of goods”

The proposed tariff increase poses big risks for both the USA and global economy.

U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday.

China said on Wednesday that "blackmail" would not work and that it would hit back if the United States takes further steps hindering trade, including applying the higher tariff rate.

Geng also said that China has "always upheld using dialogue and consultations to handle trade frictions", but that "unilateral threats and pressure will only produce the opposite of the desired result".

Slapping additional tariffs on Chinese imports - 60 per cent of which are made by foreign firms, including American companies - will only raise costs for domestic USA consumers, said Chinese Foreign Minister Wang Yi.

Recognizing this dynamic, a policymaker who is serious about reducing the USA trade deficit would at least consider controlling capital inflows to the United States, either by creating regulations that make it more hard for foreigners to invest in the US, or by taxing such investment. The rising tensions between the two nations have weighed on stock and currency markets, with the Chinese yuan falling against the dollar.

It's not as if the president doesn't have advisors capable of explaining the dangers of too much foreign investment-economist and Trump Trade guru Peter Navarro wrote an op-ed in the Wall Street Journal previous year warning that at our current rate "foreigners will eventually own so much of the USA that Americans will wind up working longer hours just to eat and to service the debt". USA stocks were mixed.

US trade representatives are trying to re-engage China in trade talks to de-escalate tensions between the two countries.

"So, the basic foundation of US-China cooperation is very strong", he said.

The Trump administration is proposing raising planned taxes on $200 billion in Chinese imports to 25 percent from 10 percent, potentially ratcheting up a trade war with China.

Trump has said in the past that "Trade wars are good and easy to win".

Tariffs on another $16bn of products are pending, the second part of tariffs on $50bn worth of imports that the U.S. announced in March.

Paulina Dedaj is a writer/ reporter for Fox News. A 25% tariff would boost the cost of a range of USA imports at a time when inflation has begun to pick up.

"Well, let's put it into arithmetic perspective. The proposed modification is to maintain the original $34 billion action and the proposed $16 billion action, and to take further action in the form of an additional 10 per cent ad valorem duty on products of China with an annual trade value of approximately $200 billion".



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