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China threatens new tariffs on US$60b worth of United States goods

04 August 2018

China's government has announced a $60 billion list of US goods including coffee, honey and industrial chemicals for retaliation if Washington goes ahead with its latest tariff threat.

But Mr Trump ratcheted up the pressure this week by asking US Trade Representative Robert Lighthizer to consider increasing the proposed tariffs to 25 per cent in a bid to force Beijing back to the negotiating table amid stalled talks.

Washington and Beijing are locked in battle over American accusations that China's export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how.

US Secretary of State Mike Pompeo (left) and China's Foreign Minister Wang Yi (right) before their bilateral meeting at the 51st Association of Southeast Asian Nations (ASEAN) in Singapore, yesterday.

"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.

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In response to a question about White House economic adviser Larry Kudlow saying that China's latest measures are "weak", Wang said: "Does he want China to take an even stronger response?"

"As to whether China's economy is doing well or not, I think it is all too clear to the whole worldwide community", Wang said, adding that China contributed a huge amount to global economic growth.

"I think most of our trade team will tell you we're moving close on Mexico".

The United States reached a surprise deal on trade last week under which Washington agreed not to put any new tariffs on imports from the European Union, forestalling a possible 25 percent levy on auto imports the Trump administration has been considering.

Washington also unveiled a list of another $200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10% import duties.

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But Trump raised the stakes this week with his threat to lift the tariff rate.

The statement said the date of implementation of the taxes will depend on the "actions of the US side" and China reserves the right to apply "other countermeasures".

The Republican president has been keen to show he is tough on trade ahead of tricky congressional elections in November - but there are growing signs of concern in the White House that the dispute could affect Trump's political base.

"Cheniere continues to see China as an important growth market and LNG as a "win-win" between the United States and China", said Eben Burnham-Snyder, a spokesman at Cheniere Energy Inc (LNG.A), which owns one of the two LNG export terminals now operating in the United States.

The $43 billion project is still in development, and the Alaska Gasline Development Corp said on Friday that it believes the "current trade tensions between the United States and China will be resolved well in advance of Alaska LNG exports to China".

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"That is the biggest force behind militarisation in this region", he said.

China threatens new tariffs on US$60b worth of United States goods