In tit-for-tat, Trump threatens more tariffs against China

In tit-for-tat, Trump threatens more tariffs against China

The tariffs, which Trump wants set at a 10 percent rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries.

Later on Friday, China announced its own tariffs on American goods, including a wide range of seafood and agricultural products, many cars and trucks, petrochemicals and an array of medical equipment. Any further response from Beijing would lead to yet more American tariffs, according to Mr. Trump.

Trump said after the legal process is complete, these tariffs worth Dollars 200 billion will go into effect if China refuses to change its practices. Trump's June 15 tariffs came in response to a months-long investigation that documented trade practices from forcing USA companies to share trade secrets to subsiding domestic industries which have been widely condemned as unfair.

China's Commerce Ministry lambasted Trump's new tariff threat, saying it violated prior negotiations between the two countries. Those could take a long and painful trade fight.

These include major American exports to China such as soybeans, which brought in $14 billion in sales past year and are grown in states that supported Trump during the 2016 presidential election. Preemptively, Trump said he would be willing to bring the total value of Chinese goods targeted with tariffs to $450 billion. He added that China is a "predatory economic government" that is "long overdue in being tackled, " matters that include IP theft and Chinese steel and aluminum flooding the USA market.

The pain has been limited so far to sellers of goods targeted by US and Chinese tariffs, but economists say the impact could spread.

China bought American goods worth $153.9 billion past year, while exports to the United States totaled $429.8 billion, according to customs data.

US President Donald Trump (R) and North Korea's leader Kim Jong Un shake hands following a signing ceremony during their historic US-North Korea summit, at the Capella Hotel on Sentosa island in Singapore on June 12, 2018.

After all, the United States sells much less to China than the other way around.

"Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong", he said in a statement announcing the possibility of additional tariffs.

The statement from Trump on Monday said that China's response showed that Beijing had no plans to address the underlying IP theft and required escalation by the US.

"As China hawks, like Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable", said Yasunari Ueno, chief market analyst at Mizuho Securities in Japan.

In the separate dispute about steel and aluminium tariffs, he also has to contend with the politically targeted retaliation that other countries such as Mexico, Canada and the European Union have in hand, meant to hit important states in the mid-term elections. USA bond yields fell in a flight to safety.

Trump said he has "an excellent relationship" with Chinese President Xi Jinping and they "will continue working together on many issues".

The ratcheting up of tensions is a blow to sentiment in the struggling US$7.2 trillion equity market, where turnover has been dwindling on concern the trade dispute will hurt China's already-slowing economy.

The problem for Beijing now, however, is that by raising the tariff stakes to 10 per cent on US$200 billion worth of goods, Trump has put any like for like retaliatory move out of China's reach, as it simply does not buy that amount of American goods.

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