Washington: US President Donald Trump has threatened to levy a 10 per cent tariff on $200bn of Chinese goods in a tit-for-tat trade row with Beijing. Trump said he asked trade advisers to identify additional Chinese products on which to impose new tariffs.
Last week Trump announced the US would impose 25 per cent tariffs on $50bn worth of Chinese goods. Beijing responded by saying it would hit 659 US goods worth $50bn with a similar tax. The US president released a statement on Monday night saying “these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced”.
“If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods. The trade relationship between the United States and China must be much more equitable,” he said. Earlier on Monday, stock markets across the globe fell amid fears of further deterioration of US-China trade relations. The Chinese product lines that have been hit range from aircraft tyres to turbines and commercial dishwashers.
In response, China announced tariffs on $34bn of US goods including agricultural products, cars and marine products which will also take effect from 6 July. Tariffs on other US goods will be announced at a later date, the Xinhua news agency reported. US tariffs that affect more than 800 Chinese products worth $34bn in annual trade are due to come into effect on 6 July. The White House said it would consult on tariffs on the other $16bn of products, and would apply these later.
The US wants China to stop practices that allegedly encourage transfer of intellectual property – design and product ideas – to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market. However, many economists and businesses in the US say the tariffs are likely to hurt some of the sectors the administration is trying to protect, which depend on China for parts or assembly.
The US announced plans for tariffs this spring, after an investigation into China’s intellectual property practices. It published a draft list of about 1,300 Chinese products slated for tariffs in April. The list released on Friday was slightly shorter, incorporating feedback and criticism received in the ensuing weeks. The plans have elicited a mixed political reaction, drawing praise from Democrats and opposition from Republicans, who typically favour free trade policies.