Published: Wed, August 08, 2018
Business | By Pearl Harrison

Trump's China Trade War Just Escalated by $16 Billion

Trump's China Trade War Just Escalated by $16 Billion

On Tuesday, the administration said it had chose to go ahead with tariffs on 279 of the 284 items added in June; they're worth about $16 billion a year.

The first tariffs were imposed in March and China responded in April.

Amid a steep correction in crude prices, China said on Wednesday that it would impose a 25-percent tariff on U.S. imports worth US$16 billion, including crude oil, diesel, cars, coal, and steel products, in retaliation to the U.S. list of US$16 billion worth of Chinese imports that will be taxed by U.S. authorities from August 23.

Sales at 50 major Chinese retailers fell by 3.9 per cent in July from a year earlier, raising concerns over whether Beijing can push through its plan to ramp up domestic consumption to offset the effects of the intensifying US-China trade war. The markets will turn weaker if the tariff damage starts to show up in US inventories numbers, but since Chinese refiners had been limited buyers since early July, it may not show up in the numbers for weeks.

And the conflict is likely to escalate: The administration is preparing tariffs of up to 25 percent on an additional $200 billion in Chinese products.

The tranche of 25 per cent tariffs - which covers 279 products including electronic parts, plastics, chemicals, batteries, tractors and railway cars - follows $US34 billion worth of tariffs announced by the U.S. government in July.

USTR is conducting a public comment period for those tariffs, which could reach 25 percent, due to end September 5.

It will be the second time the USA slaps duties on Chinese goods in about the past month, despite complaints by American companies that such moves will raise business costs and eventually consumer prices. US President Donald Trump accused Beijing of "being vicious" on trade, stressing that Chinese measures were targeting US farmers on objective.

In July, the Chinese trade surplus with the U.S. dropped three percent, reports South China Morning Post.

Sales to the USA rose by 13.3%, while China's surplus with the States shrank marginally to $28.1bn (£21.7bn) last month from a record $29bn (£22.4bn) in June. That was off slightly from June's 13.6% rate but still stronger than China's global export growth. He further added that his refinery had cancelled USA crude imports and would switch to Middle East or West African supplies instead. China responded by promising to hit $60 billion worth of United States goods coming into the country with tariffs. After Liu visited Washington later that month, the nations released a joint statement pledging to reduce the USA trade deficit with China, among other things.

Negotiations broke off after the Trump administration imposed the tariffs on $34 billion in Chinese imports, a move the Chinese said would void any promises they'd made in negotiations.

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