China hits back at USA with $60bn tariff threat

China hits back at USA with $60bn tariff threat

The US-China tit-for-tat in trade tariffs has intensified with Beijing warning of an additional 25-per cent tariff on $60 billion of imports from America in case new levies were imposed on Chinese goods.

The last time China was hit hard by growth fears, the shock waves rattled financial markets around the world, including in the U.S. In August 2015, the People's Bank of China stunned investors by lowering its target level for the yuan against the dollar, triggering a global selloff in stocks.

The Chinese finance ministry said 5,207 goods imported from the USA could be subjected to the fresh tariffs, with levies ranging from 5% to 25% on products including aircraft, soya bean oil, smoked beef, coffee and flour.

"China is forced to take countermeasures", said a ministry statement. A 25% tariff would boost the cost of a range of USA imports at a time when inflation has begun to pick up.

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

China has now either imposed or proposed tariffs on $110 billion in US goods, representing the vast majority of China's annual imports of American products.

White House press secretary Sarah Sanders in a statement suggested China to "address the longstanding concerns about its unfair trading practices", instead of retaliating with their own sanctions.

By contrast, the Chinese phone maker Huawei has just overtaken the United States brand Apple as the most purchased make of smartphone in the world.

He also identified agriculture as another Valley industry that will be among those most significantly impacted. China's biggest U.S. imports by value in 2017 were aircraft and related equipment, soybeans and autos. "It is very early in the game, but definitely a negative effect".

Then in the first follow-up tweet, he added: "Tariffs have had a tremendous positive impact on our Steel Industry". "It's the more far-reaching, unintended consequences, which you don't always know at the beginning".

July 16: China filed another complaint to the WTO over Trump's $200 billion tariff plan. After the earlier action against $34 billion of USA goods, that left about $120 billion available for retaliation. "China knows what we are asking, they just have not made satisfactory responses".

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The proposed tariff increase poses big risks for both the US and global economy.

Chinese leaders have offered to purchase more American goods, but rejected the U.S. request to change technology policies they see as a path to prosperity and global influence.

In addition to Beijing's top-down control, the recent diversification of China's economy and its exports makes the country better positioned to endure a trade war now than it could have in the past, NPR's Jim Zarroli reports. But. the Chinese Party and the government control the media as well as a good bit of the economy.

"China's countermeasures with differentiated tariff rates are rational and restrained, and were proposed after extensively soliciting opinions and careful evaluation". It will be September at the earliest before the US decides whether to impose those tariffs.

Beijing has insisted its measures are "rational" and warned the United States its tactics would not work.

The one that's creating the most interest is the one with China, as the world's two largest economies wrangle for global influence.

A top adviser to US President Donald Trump said the newly proposed tariffs were not as severe as the White House had been bracing for, and he warned China not to test Trump's resolve.

The move was meant to bring China back to the negotiating table for talks over US demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit.

The foreign ministry spokesman appealed to Washington to negotiate but could not confirm reports the two sides were setting up talks.

"The US has repeatedly betrayed the consensus reached by negotiations, and accelerated the trade war unilaterally again". Trump has threatened to slap tariffs on virtually all of China's exports to the United States. It's a "race to the bottom that will harm American consumers, farmers and USA industry".

"China promises that it will continue to unswervingly push forward reform and opening-up based on established arrangements and pace, firmly support economic globalization, firmly safeguard free trade rules and multilateral trade mechanisms to realize joint development and share prosperity with all countries that pursue progress", the commission said. It would become another factor for the Federal Reserve to consider as it decides how quickly to raise interest rates.

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