Trump, China trade war: 25% tariff on $200 billion of Chinese import

Bike Europe has reported that the Chinese government will not tolerate blackmail from the American adminsitration and that they would respond in kind.

China's Ministry of Foreign Affairs said it will fight back should the US further increase tariffs.

Fast forward to today, when the WSJ gives some further color, noting that while "the administration didn't spell out a particular rationale for increasing the tariff...."

The US is upset that China chose to adopt a retaliatory strategy in a tit-for-tat response.

The higher tariff rate, if implemented, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of US tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

But President Donald Trump now wants the U.S. Trade Representative to consider more than doubling those tariffs to 25 percent. Officials in Beijing have vowed to respond with the same amount of tariffs on USA products.

The next wave of USA tariffs is set to kick in as soon as Wednesday, with the possible imposition of duties on another $16 billion of Chinese imports.

"These [10%] duties, if applied, would cause disproportionate economic harm to USA interests", he stressed in testimony to United States trade officials, adding that any escalation would be catastrophic for U.S. companies. Trump and other NAFTA critics say the agreement encouraged US manufacturers to move factories - and jobs - south of the border to take advantage of lower-wage Mexican labour. Previously, the administration was considering just a 10% tariff on these goods. "But there's nothing you can do about 25".

U.S. Commerce Secretary Wilbur Ross downplayed the impact of the tariffs on the American economy.

China has already complained to the World Trade Organization about the 10% tariff plan.

China on Thursday (Aug 2) urged the United States to return to reason after the Trump administration sought to ratchet up pressure for trade concessions by proposing a higher 25 per cent tariff on US$200 billion worth of Chinese imports.

The decision may come as a result of reports that the trade war is hurting the Chinese economy, while so far the impact on the USA has been limited-a fact reflected by a buoyant stock market, low unemployment, and acceleration of wage gains.

Markets were however steady on Tuesday, given a boost by hopes for new negotiations. "The United States' method of adding pressure will not, I'm afraid, have any effect", Wang told reporters on the sidelines of a regional forum.

The Donald Trump administration fires another shot in its ongoing trade war with Beijing.

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