Published: Wed, September 19, 2018
Global Media | By Garry Long

U.S. wages trade war on China with new $200bn tariffs

U.S. wages trade war on China with new $200bn tariffs

The commerce ministry's statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the United States action.

The tariffs on the US$200 billion list will start on September 24, according to a senior United States administration official.

"As President, it is my duty to protect the interests of working men and women, farmers, ranches, businesses, and our country itself", Trump said in a statement. Trump has already imposed 25 percent tariffs on $50 billion in Chinese goods. But China previously released a $60 billion list of American goods for retaliation.

US President Donald Trump has announced he will impose 10 per cent tariffs on $US200 billion worth of Chinese imports.

The U.S. government did withdraw some items from its preliminary list of imports to be taxed, including child-safety products such as bicycle helmets. The Apple products on the list reportedly included the Apple Watch, Apple Pencil, the HomePod smart speaker, AirPods and various chargers, cables and adapters.

"We welcome this development and we appreciate the administration's time and effort to listen to industry and consumer concerns", a Fitbit spokeswoman told Reuters. "We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly", he said.

United States President Donald Trump on Tuesday accused China of seeking to influence upcoming U.S. elections by taking aim at his political support base in the countries' escalating trade war.

China said it has no choice but to retaliate, and it accused the USA of not being honest.

Trump has also complained about America's massive trade deficit - $336 billion previous year - with China, its biggest trading partner.

But tariffs are also used as a trade weapon, in which a country heavy on imports, like the US, attempts to use the surcharge to force policy changes that diplomacy has failed to reach. But Trump quickly backed away from the truce.

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According to an analysis by Bloomberg, the new tariffs will have an impact on Beijing, eroding 0.5 percentage point off China's 2018 GDP growth. The tariffs focused on industrial products, not on things Americans buy at the mall or via Amazon.

By expanding the list to $200 billion worth of Chinese imports, Trump risks spreading the pain to ordinary Americans. That would mean imposing new taxes on all of the goods the United States imports from China.

Both countries' tariffs come into force on September 24. U.S. Treasury Secretary Steven Mnuchin last week invited top Chinese officials to discussions.

Other officials who advise the country's leaders are suggesting China impose limits on the sale of parts and supplies needed by USA businesses, using "export restraints" to threaten their supply chains.

"The president's negotiating tactics do not work well with China's way of thinking", said Sung Won Sohn, chief economist at SS Economics in Los Angeles.

"Given the diametrically opposing views Washington and Beijing have of their problems, this trade war is unlikely to get better before it gets worse - for them, or for any of us". And from 2019 the tariffs will be raised to 25 percent, unless the two governments agree on a trade deal.

However, if Trump expands the tariffs to an additional $267 billion worth of goods then almost every Chinese import would be affected, including the iPhone, along with all other smart phones.

"Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower USA growth and competitiveness and higher prices for United States consumers", Apple said in a letter commenting on the proposal.

The US Chamber of Commerce, retailers, agricultural groups and some members of the Republican Party have spoken against his tariff campaign.

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