Published: Sun, July 15, 2018
Money | By Hannah Jacobs

China says tariffs to offset trade war fallout

China says tariffs to offset trade war fallout

The United States had just imposed tariffs on US$34 billion worth of Chinese goods on Friday, drawing immediate retaliatory duties from Beijing on USA imports in the first shots of a heated trade war.

The US Trade Representative office will hold hearings on the targeted products and an administration official said it would take about two months to finalise the list, at which point Trump would decide whether to go ahead with the tariffs.

Last week, Washington imposed 25 per cent tariffs on $US34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of United States exports to China.

The eventual goal is to impose tariffs on 40 percent of Chinese imports, the same proportion of USA goods hit by Beijing's retaliation, an official told reporters.

The Chinese government vowed Wednesday to take "firm and forceful measures" against US threats to expand tariff hikes to thousands of products like fish sticks, apples and French doors as their trade dispute escalates.

"Despite the relative optimism our members feel guarded about the future", AmCham said in its statement. By expanding the list, the administration is beginning to hit products that USA households buy, including such things as electric lamps and fish sticks.

Companies are "scrambling to readjust supply chains" so US -bound goods don't pass through China, Harborn said at a news conference. Each side is planning tariffs on a further $16 billion in goods that would bring the totals to $50 billion.

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms and increasing the stakes for lawmakers in Trump's Republican party facing elections in November.

It seems that the USA is escalating the scale of this trade friction.

The statement said importers would be encouraged to shift to buying soybeans and other farm goods from countries that aren't affected by the tariffs.

The new trade frictions sent investors running for cover, with equity markets across Asia tumbling more than one percent. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators.

The office will accept public comments and hold hearings on the plan august 20-23 before reaching a decision after august 31, according to a senior administration official who briefed reporters on condition of anonymity. Chinese tactics, the administration says, include outright cybertheft and forcing US companies to hand over technology in exchange for access to the Chinese market.

The overall blow from Friday's tariff hikes to the world's second-largest economy should be limited, according to private sector analysts.

"The outburst of large-scale mutual levying of tariffs between China and the United States will inevitably destroy Sino-US trade", assistant minister of commerce Li Chenggang told a forum in Beijing. "Regrettably, the US side did not honour its words, chopping and changing all the time".

The trade war between the world's top two economies landed at the World Trade Organization on Wednesday, as the United States demanded a "reckoning" over China's membership in the body.

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