China vows to hit back over new United States tariffs

Posted July 12, 2018

"Therefore, if the U.S. escalates its tariff measures to an additional United States dollars 200 billion of products, this would mean that around half of Chinese exports of goods to the USA would face significant US punitive tariff measures", Biswas said in a note.

In announcing the proposed tariffs, USA trade representative Robert Lighthizer said, "For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition".

ANALYST'S TAKE: "Given the magnitude and breadth of the tariff list, the impact is expected to ripple through supply chains and cause collateral damage on regional economies", Zhu Huani of Mizuho Bank said in a commentary.

'To protect the core interests of the nation and its people, the Chinese government will be forced to impose necessary countermeasures'.

"The trade dispute between China and the a big deal, and to the extent that it goes to a full scale war that potentially is recessionary basically for the global economy so we have to be careful here", Tal said.

The list includes agricultural products, minerals and consumer goods such as handbags, among other items.

While China does not export enough goods to the USA to match the value of the announced tariffs, combining United States corporate revenue inside China with exports would give America a trade surplus of US$20 billion, according to research from Deutsche Bank cited by Bloomberg.

"This act is typical trade bullying", a spokesperson for China's Ministry of Commerce said in a statement.

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

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For now, the USTR continues to work on the process of finalizing an additional $16 billion in goods to face 25 percent tariffs to bring the total up to $50 billion.

U.S. President Donald Trump and first lady Melania arrive on Air Force One at Beijing, China, November 8, 2017.

But the new tariffs will not be imposed until later this summer, after a public comment period.

Senate Finance Committee chair Orrin Hatch (R-Utah) also took aim at the announced list, saying it "appears reckless and is not a targeted approach".

The U.S. Chamber of Commerce has supported Trump's domestic tax cuts and efforts to reduce regulation of businesses, but does not back Trump's aggressive tariff policies.

In a bid to minimize tensions both diplomatically and in the financial markets, a memo from the Chinese government was distributed to reporters outlining instructions on how to cover the tariff battle with America.

Meh. What's $200 billion these days?

"Our global trade is extremely important and we have to start off on the right track and I'm not sure we are right now", he said. Imposing taxes on another US$200 billion worth of products will raise the costs of everyday goods for American families, farmers, ranchers, workers and job creators.

Containers are transferred at a port in Qingdao in China's eastern Shandong province on July 6, 2018.

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