Trade war escalates as Trump imposes tariffs on $200bn of Chinese goods

Galtero Lara
Setiembre 18, 2018

Trump said China had refused to change the unfair practices that hurt U.S. businesses and workers. "But at this time, everything the United States does does not give the impression of sincerity or goodwill", he added.

The Chinese say they are willing to talk, but find Trump's tariff threats nothing short of a bullying tactic - and vowed to retaliate. It will rise to 25% at the end of the year.

China is reviewing plans to send a delegation to Washington for fresh talks in light of the USA action, the South China Morning Post reported on Tuesday, citing a government source in Beijing.

Lower economic growth in China would have spill-over effects to the rest of Asia given that, just as it provides critical links in the supply chains of U.S. companies, they are also plugged into its supply chain.

China has vowed to retaliate against new U.S. tariffs, with state-run media arguing for an aggressive "counter-attack".

"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", Trump said in a statement.

But Trump and European Commission President Jean-Claude Juncker announced a plan on July 25 to defuse the row, with Washington backing off the auto tariffs against Europe, at least for now.

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The move, which sees $200 billion worth of Chinese imports slapped with a ten percent levy, comes amid a deepening trade spat between the world's two largest economies.

If the U.S. continues down this path it will damage the global economy and the layers of multi-lateral relationships that have underpinned growth in the post-war era.

Bundles of aluminum ingots sit stacked at a China National Materials Storage and Transportation Corp. stockyard in Wuxi, China.

China wants talks based on 'mutual trust, ' said a foreign ministry spokesman, Geng Shuang. But a year ago, we lost $375 billion in deficits, and we had, in my opinion, way over $500 billion in cash.

The United States had proposed the talks, but at the same time moved forward with planning additional tariffs on some $200 billion of Chinese products.

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"My administration will not remain idle while those interests are under attack".

The latest round of tariffs is the biggest so far, imposing higher taxes on almost 6,000 items.

The officials said China had been given "chance after chance" to change the trade practices considered unfair to U.S. businesses, but "have remained obdurate".

Trump campaigned for the presidency on a pledge to tax imports and rewrite or tear up trade agreements that he said put USA companies and workers at a disadvantage.

"Tariffs ultimately result in consumers paying more and disruptive trade practices ultimately hurt economies rather than help them", Birmingham told ABC radio.

"Even if the USA wants to set up an alternative supply chain in a third country, that takes time", Lou said. "And they can't take actions that entirely flout the rules of the global trading system", the official said.

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"Negotiated settlement, instead of tariffs, represents the best pathway to resolving outstanding trade issues without creating uncertainty and instability that will negatively impact our port", Sanfield said.

USA companies have already said they are anxious about the effect of higher costs on their businesses and warned of the risk of job cuts.

Birmingham said the Australian government was "always concerned where people are not necessarily following the traditional rules-based order of worldwide trade".

But the adjustments did little to appease technology and retail groups who argued USA consumers would feel the pain. "Tariffs are taxes, plain and simple".

Those included high-profile consumer products, such as smart watches, bicycle helmets, play pens and baby auto seats.

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