US-China trade division deepens as Trump announces new tariffs
18 Sep 2018 - by
A tense wait-and-see situation prevails after the US fired another salvo in its trade stand-off with China which has vowed to retaliate against the additional 10% tariffs US importers will have to pay on $200bn worth of goods exported to the States.
US importers are already paying 25% tariffs on $50bn worth of goods imported from their biggest trade partner.
Recently the government of Xi Jinping warned Donald Trump’s administration of dire consequences should it press ahead with the long-mulled-over tariffs on a further $200bn of Chinese exports.
But earlier today, as news of the tariffs rippled through the trade vine, Trump seemed impervious to Chinese threats as he said that the new hikes would most likely be increased to 25% come 2019.
Asked whether it would definitely happen if China retaliated, Trump said “most certainly”.
China’s Ministry of Commerce has since hinted at instituting tariffs on $60bn of US imports.
Trump threatened that such a move would persuade his administration to pursue tariffs on a further $267bn of Chinese imports.
If that happens, China will be subject to tariffs on more than $500bn of US exports – its entire trade bouquet exported to the States.
In the meantime Trump is refusing to back down despite moves made by a galvanised industry body, Americans for Free Trade (AFT), lobbying for conciliatory engagement.
He reiterated that his tariff stance actually served to protect US businesses against “unfair practices” in China.
But AFT has advised Trump that the tariffs will ultimately boomerang against businesses based on home soil, many of which operate in the technology and manufacturing space and depend on China for component part imports.
Reacting to the fresh penalties, China indicated that it was factoring the tariffs into its economy which it said was strong enough to cushion the impact.