China trade war enters new phase

China trade war enters new phase

China trade war enters new phase

United States stock futures and Asian shares fell on Tuesday after U.S. President Donald Trump said he will impose tariffs on an additional $200 billion worth of Chinese imports, in a sharp escalation of the trade conflict between the world's two biggest economies The tariffs will be set at 10 percent.

Collection of tariffs on the long-anticipated list will start 24 September but the rate will increase to 25% by the end of 2018, allowing United States companies some time to adjust their supply chains to alternate countries, a senior administration official said.

Trump, in a statement announcing the new round of tariffs, warned that if China takes retaliatory action against USA farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

"On the Chinese side, Mr. Trump has burned a lot of political capital so it's hard to see how talks can resume if Mr. Trump goes ahead on the $200 billion", Freya Beamish, chief Asia economist at Pantheon Macroeconomics, told the Reuters Global Markets Forum.

The list slated for tariffs originally included more than 6000 items, but USA officials said they had removed about 300 types of items.

Beijing has vowed to retaliate on a range of U.S. products valued at around $60 billion.

The trade war between America and China has escalated, fuelling fears that the global economy could be dragged down.

China has matched previous tariff moves dollar for dollar, but the number of U.S. goods to tax is dwindling because, for many years, it has imported only about one-quarter as much as it exports to the United States.

Chinese imports from the United States grew by nearly 500 percent over the past five years, such that as of 2017 Chinese buyers accounted for almost one in every five dollars in USA export revenue.

So far, the United States has imposed tariffs on $50 billion worth of Chinese products to pressure Beijing to make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies.

But China said it would turn down the offer if the USA went ahead with more tariffs, CNN said. "I think it's going to work out very well with China", he said.

The short time frame before the tariffs take effect means that suppliers will face an unexpected 10 percent charge on imports that are already in transit but arrive after next Sunday.

In the first two rounds of tariffs, the Trump administration was careful to try to spare consumers from the direct impact of the import taxes.

But there is little prospect of such an outcome because, while the United States is demanding that the trade deficit with China be reduced, the conflict does not merely centre on that issue.

The additional tariffs which will take effect on September 24.

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Other commentators have suggested Beijing use its holdings of USA government debt or target American companies in China.

USA companies have already said they are anxious about the effect of higher costs on their businesses.

"This backdrop fits with the singles and doubles thesis we laid out Friday, which argues not to get too invested in a single trade idea and to remain nimble", says McCormick.

In theory, the tariffs will make US-made products cheaper than imported ones, and so encourage consumers to buy American.

The statements come as relations between the U.S. and China appear to strain.

The upcoming tariffs will be on a list of items that included internet technology products and other electronics, printed circuit boards and consumer goods, including Chinese seafood, furniture and lighting products, tires, chemicals, plastics, bicycles and auto seats for babies.

Washington, Europe and other trading partners say those plans violate China's market-opening commitments.

His comments are likely to further rattle USA businesses, which have pleaded with the administration to abandon the tariffs and warned they will raise prices, cost jobs and hurt the US economy.

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