United States mulls 25% tariff on Chinese goods worth $200bn

Ann Santiago
August 4, 2018

The Trump administration is proposing raising planned taxes on $200 billion (22 trillion yen) worth of Chinese imports to 25 percent from 10 percent, turning up the pressure on Beijing in a trade war between the world's two biggest economies.

"In violation of the bilateral consensus reached after multiple rounds of negotiations, the United States has again unilaterally escalated trade frictions", the Chinese State Council Tariff Commission said in its statement on Friday.

"These [10%] duties, if applied, would cause disproportionate economic harm to United States interests", he stressed in testimony to USA trade officials, adding that any escalation would be catastrophic for U.S. companies.

The U.S. has said a second round on 16 billion dollars in Chinese imports could be implemented soon.

Foreign ministers of ASEAN countries appreciated China's support in building ASEAN community as well as the Belt and Road Initiative for boosting regional interconnection and common development, and expressed the hope that both sides will continue to enhance cooperation in trade and economy, innovation and tourism.

"But dialogue must be based on mutual respect, equality, rules and credibility", said Geng.

China promptly promised it would take countermeasures of its own.

U.S. Trade Representative Robert Lighthizer said his agency is seeking comments from industry about the proposed tariffs, with a deadline of September 5.

Washington is preparing to also impose tariffs on an extra US$16 billion of goods in coming weeks, and Trump has warned he may ultimately put them on over half a trillion dollars of goods, roughly the total amount of United States imports from China a year ago. It wants China to stop stealing US corporate secrets, abandon plans to boost its high-tech industries at America's expense and stop subsidizing Chinese companies with cheap loans that enable them to compete unfairly. But Chinese Foreign Ministry spokesman Geng Shuang reiterated at a regular news briefing that the United States' efforts at "blackmail" would fail.

The higher tariff rate, if implemented, would apply to a list of goods valued at US$200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of USA tariffs on US$34 billion worth of Chinese electronic components, machinery, autos and industrial goods. "Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods", Ennis said.

President Donald Trump asked the US Trade Representative to consider increasing the proposed tariffs to 25 percent from the announced 10 percent, US Trade Representative Robert Lighthizer said. "The cost increases will be passed on to customers, so it will affect most Americans' pocketbooks".

China said on Wednesday it will retaliate if the United States takes further steps hindering trade, after a source said the Trump administration proposes slapping 25 percent tariffs on $200 billion of imported Chinese goods. Administration officials are exploring an additional $200 billion of goods on which tariffs might be imposed.

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