Trump Raises Proposed Chinese Tariffs to 25%

Dwayne Harmon
August 4, 2018

However, the decision risks escalating tensions between the world's two largest economies.

Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent USA business groups, while tired of what they see as China's mercantilist trade practices, have condemned Trump's aggressive tariffs.

At a news briefing, Foreign Ministry spokesman Geng Shuang accused the US of engaging in "blackmail", according to Reuters.

"If the USA takes measures to further escalate the situation, we will surely take countermeasures to uphold our legitimate rights and interests", a Chinese foreign affairs ministry spokesman said Wednesday, according to Bloomberg, which first reported the proposed escalation.

Geng said China's door to dialogue on the trade dispute is open, but that it had to be based on mutual respect and equality.

Meanwhile, Treasury Secretary Steven Mnuchin is reportedly privately discussing the possibility of reaching a trade agreement with China's Vice Premier Liu He.

While the duties would not be imposed until after a period of public comment, raising the proposed level to 25 per cent would escalate the already bitter trade dispute.

Finally, when it comes to what China does, look no further than the Yuan, whose sharp devaluation started in mid-June, when Trump formally launched the trade war, announcing that new tariffs on $50BN in Chinese products will come into effect, followed just days later with the launch of the next, $200BN round of tariffs.

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In a tweet last month, US President Donald Trump suggested that China could be undermining a North Korean denuclearization deal because of the ongoing trade war.

A spokesman for China's foreign ministry appealed to Washington to negotiate but could not confirm reports the two sides were setting up talks.

China's appetite for imported copper has yet to falter, however, with first-half imports of unwrought copper up 16.3 percent from a year ago, according to Chinese customs data.

Trump has ultimately threatened tariffs on over $500 billion in Chinese goods, covering virtually all United States imports from China. The implementation could be delayed for weeks as the administration works out the details of which products it will target. Beijing retaliated by imposing similar charges on the same amount of USA products.

"Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses", Mr Lighthizer said in a statement.

Benchmark U.S. government bond yields edged lower on Thursday as investors sought safe-haven debt while the dollar.DXY rose against a basket of currencies. That case concluded China was stealing American technology and tariffs were needed to offset the damage. USA stocks were mixed. The Ministry of Commerce in Beijing didn't immediately respond to request for comment.

Other US goods targeted by China also included semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, beef, steel products and coffee.

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