Trump threatens extra tariffs on US$200b of Chinese goods

Trump threatens extra tariffs on US$200b of Chinese goods

Trump threatens extra tariffs on US$200b of Chinese goods

While we have been arguing for a "Grand Bargain" scenario since the US-China trade spat started, the recent development suggests we are moving more towards the "trade war" scenario.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump said in a statement Monday announcing the new action.

"China has pursued an implicit strategy of trading domestic market share for new foreign technology", the report said. "This would likely violate WTO rules, but I suspect China will care about violating WTO rules as much as Trump does".

Mr Pompeo raised the trade issue directly with China last week, when he met in Beijing with President Xi Jinping and others.

If China retaliates again, Trump is threatening tariffs on another $200 billion.

Despite the threat from Trump, China vowed to retaliate with "strong" countermeasures if the US goes ahead with the new tariffs.

President Donald Trump announced Monday that he was considering a 10 percent tariff on $200 billion in additional imports from China. The administration has identified $200 billion in Chinese exports it plans to add tariffs to, on top of the original $50 billion in products it first made a decision to go after.

Gary Cohn, Mr Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt - "historic ingredients for an economic slowdown". "Again and again the US has been provoking a trade war".

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For months now, the United States and China have been exchanging ever-escalating threats, raising fear about a potentially destabilizing trade war.

Trade frictions between the United States and Canada have been particularly strained in recent weeks, with Trump taking umbrage at remarks by Canadian Prime Minister Justin Trudeau that were critical of the heavy US tariffs.

Economists are starting to warn that the tit-for-tat tariff threats between the United States and China, should they all be implemented, would meaningfully slow USA growth.

China, of course, imports nowhere near $250 billion, let alone $450 billion in goods from the USA each year that it could tax in retaliation. That would leave about $120 billion of imports available for retaliatory tariffs after Saturday's announcement.

U.S. Trade Representative Robert Lighthizer said his office was preparing the proposed tariffs and they would undergo a similar legal process as previous ones, which were subject to a public comment period, a public hearing and some revisions. Trump said Americans are now being taken advantage of when it came to trade.

Mr Trump, pursuing his "America First" policy, has been insisting that China has been unfairly benefiting from a massive trade imbalance with the U.S., now estimated to be $376 billion.

"This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States".

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