Published: Sat, August 04, 2018
Markets | By Erika Turner

China threatens to slap import tax on $60 billion of USA imports

China threatens to slap import tax on $60 billion of USA imports

China's government has announced a $60 billion list of USA goods including coffee, honey and industrial chemicals for retaliation if Washington goes ahead with its latest tariff threat.

The ministry also warned that it reserves the right of further countermeasures in the intensifying trade war.

Today's threat targeting a smaller amount of US goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.

President Donald Trump this week ordered officials to consider imposing a 25 per cent tax on US$200 billion worth of imported Chinese goods, up from an initial 10 per cent rate.

Chinese and U.S. flags are set up for a signing ceremony during a visit by U.S. Secretary of Transportation Elaine Chao at China's Ministry of Transport in Beijing, China April 27, 2018.

Duties ranging from 5 per cent to 25 per cent will be levied on 5,207 kinds of American imports if the usa delivers its proposed taxes on another US$200 billion of Chinese goods, the Ministry of Finance said in a statement on its website late Friday.

There have also been concerns that the trade tensions could dampen business confidence and lead companies to shelve spending and hiring plans.

"As the total value of goods under tariffs shoots up, China has little choice but to use LNG and others to top up the value", said Lin Boqiang, professor on energy studies at China's Xiamen University. "But those fears could materialize going forward if things get worse".

Washington is expected to soon implement more tariffs on $21 billion in additional Chinese goods, which China has already announced it will match immediately.

China's Finance Ministry unveiled the new tariffs on 5,207 goods imported from the United States in a statement on its website yesterday evening.

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The Chinese Commerce Ministry blamed the USA for escalating the situation.

"They better not underestimate President Trump's determination to follow through on our asks".

"China always believes that consultation on the basis of mutual respect, equality and mutual benefit is".

Answering a reporter's question about what was specifically said on trade, Wang said: "We did not speak in such details".

"The US side has repeatedly escalated the situation against the interests of both enterprises and consumers, and China has to take necessary countermeasures to defend its dignity and the interests of its people", the Commerce Ministry said in its statement.

Trump campaigned on a promise to bring down America's massive trade deficits by renegotiating trade agreements and getting tough on countries like China that sell the US far more than they buy from it.

China would likely hike purchases from Saudi Arabia, Russia, the United Arab Emirates and Iraq if the tariffs slowed USA flows, said Neil Atkinson, head of the oil industry and markets division at the International Energy Agency.

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.

"Foreign investors don't want to be in China". China's growing sweet tooth is seen as a big sales opportunity for worldwide makers of cookies and chocolate bars like Mars and Hershey HSY.N .

China's biggest USA imports by value in 2017 were aircraft and related equipment, soybeans and autos.

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