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China threatens new tariffs on $60bn worth of United States goods

06 August 2018

Wang also hit back at comments by top White House economic advisor Larry Kudlow, who ridiculed China's tariff threat as "weak" and said the world's second-largest economy was in significant "trouble".

President Donald Trump tweeted Sunday morning that his tariffs are "working big time" and made a freaky claim that the money raised from these new import taxes will go a long way to helping pay down America's large debt.

At a time when China is opening its domestic market to more foreign trade and investment than at any time in China's modern history, policy makers in Beijing have opted to retaliate against America's ongoing tariff onslaught in a manner that will force U.S. producers to apprehend the reality that in a prolonged trade war of Washington's own making, United States industries will be the penultimate victims.

But economists now worry that a continually widening trade deficit - which will be exacerbated if Trump keeps upping tariffs - will slow the USA economy in the second half of the year, reports The Wall Street Journal.

China has said new duties will be applied only if Washington pulls the trigger on its new tariffs. US businesses either eat that extra cost or pass it along to consumers.

"The US side has repeatedly escalated the situation against the interests of both enterprises and consumers", the Chinese Commerce Ministry said in its statement.

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U.S. trading partners have responded measuredly in kind, with their own 2,3 percent in tariffs on USA exports on the total $2,58 trillion United States exports worldwide. A 25% tariff would boost the cost of a range of USA imports at a time when inflation has begun to pick up. This scenario would involve the U.S. slapping 25% tariffs on all goods from both China and the European Union, and them responding with similar measures. From Apple to General Motors, a long list of large US enterprises have transferred extensive operations to China and could be vulnerable to any response from Beijing.

The US and China implemented tariffs on $34 billion worth of each others' goods in July.

Trump, who has accused China and others of exploiting the United States in global trade, has demanded that Beijing make a host of concessions to avoid the new duties on $200 billion of Chinese goods, which could be imposed in the weeks after a comment period closes on September 5.

A dip in auto exports and rising oil prices in June drove the biggest increase in the United States trade deficit in 19 months, reversing much of May's export bonanza, the government reported Friday.

Several countries, including China, had a say in the matter because Qualcomm sells its products globally and the proposed merger could have been seen as giving the company a price monopoly, it said.

Other U.S. goods targeted by China in the latest list include semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, iron ore, steel products, roasted coffee, sugar, foods containing chocolate, candies, and even auto windscreens.

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Toymaker Hasbro is moving more production out of China, US conglomerate Honeywell wants to use more supply chain sources from countries outside China and home furnishing company RH expects to cut the amount of goods sourced from China, according to Reuters. "China knows what we are asking, they just have not made satisfactory responses".

After weeks of half-measure negotiations between the two countries, talks have broken down and now both the White House and Beijing are locked in a rapid escalation of trade threats that experts have predicted could damage both economies.

The Ministry threat came after Mr. Wang met with U.S. Secretary of State Mike Pompeo at a meeting of the Association of Southeast Asian Nations (ASEAN) in Singapore on Friday.

President Donald Trump blames the practices for putting United States companies at a disadvantage and helping to create a trade deficit.

Earlier this year, the U.S. also started charging levies on the imports of steel and aluminium from the European Union, Mexico, and Canada.

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China threatens new tariffs on $60bn worth of United States goods