Published: Fri, July 13, 2018
Global | By Marsha Munoz

Only 4 Days in, China-US Trade War Escalates

Only 4 Days in, China-US Trade War Escalates

"As a result of China's retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports".

China imported US goods worth $130 billion a year ago and Friday's tariff hike hit $34 billion of that, with another $16 billion cited for a possible increase.

The abrupt escalation is "totally unacceptable", said a Commerce Ministry statement.

The planned new tariffs follow the 25 percent imposed on $34 billion in Chinese products, which Beijing responded to by hitting the same amount of USA imports.

The President's latest maneuver in the escalating trade war between the world's two largest economies prompted Republican leaders to rescind their support of the Trump administration's trade policy.

On Wednesday, China's main stock index lost 1.8 percent and Japan's market benchmark fell 1.1 percent.

More news: Kane 'gutted' as England's World Cup dream dies

The S&P 500 dropped 0.7 percent as energy, materials and industrials all fell more than one percent.

The onshore yuan tracked its offshore counterpart lower with traders closely watching the key 6.7 per dollar level as pressure mounted on the currency.

A possible second round of tariff hikes announced Tuesday by the US Trade Representative targets a US$200 billion list of Chinese goods. They warned tariffs on imports raise consumer prices and expose US farmers and manufacturers to retaliation.

The list is subject to a two-month public comment period before taking effect.

"Tonight's announcement appears reckless and is not a targeted approach", said Senate Finance Chairman Orrin Hatch in a statement. "The steel tariffs alone could increase the cost of a 280-mile pipeline by as much as $76 million", Gerard, Dooley, and Hamberger said.

Mr Trump has been considering tariffs against China since his officials concluded in March that Beijing violates United States intellectual-property rights, such as by forcing American firms to hand over technology.

More news: Prince William and Duchess Kate christen third child Prince Louis

Fresh US tariffs would also come at a time when the Trump administration is seeking Beijing's help reining in North Korea's nuclear-weapons programme.

Lighthizer said the initial $50 billion in US tariffs were aimed at goods that "benefit from China's industrial policy and forced technology transfer practices".

"American families are the ones being punished". The prospect of an worldwide trade war has sent jitters through world markets. However, China has vowed to match every tariff tit-for-tat, and will likely follow through. Members of Congress pushed back Tuesday night and early Wednesday against what they saw as harmful penalties that would leave American farmers and consumers caught in the crossfire. One of the officials said the USA has repeatedly made its concerns clear and continues to hope for a negotiated solution, but Beijing hasn't changed its behavior.

The National Association of Manufacturers also criticized the USA decision, saying this latest round of tariffs could undermine the economic gains from the administration's tax and regulatory reform policies.

United States policy "actually interferes with the process of economic globalization" and "damages the world economic order", charged Li.

The latest news on the trade front came after Washington slapped 25% tariffs on $34 billion of Chinese imports last week, a move against which China immediately retaliated with matching tariffs on the same amount of us exports to China. "China has no option but to fight fire with fire".

More news: Thai volunteers react as cave rescue concludes

"It's a bit of wait and see", Holmes said.

Like this: