China to Hit U.S. With 'Synchronized' Retaliation for Latest Tariffs

Pauline Gross
September 18, 2018

"Tariffs have put the United States in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been nearly unnoticeable", Trump said.

US President Donald Trump has enforced higher import taxes will apply to more than 5000 Chinese goods. But China previously released a $60 billion list of American goods for retaliation.

Trump initiated the fight to punish Beijing for what he says are China's predatory tactics to try to supplant USA technological supremacy.

Additional tariffs on US$267 billion of imports from China would push the cumulative total beyond the amount of goods the USA bought from the Asian nation past year.

The US is imposing new tariffs on $200bn (£150bn) worth of Chinese goods as it escalates its trade war with Beijing. Apple, which received an exemption to the new tariffs on goods imported from China, gained 0.9 percent to $219.88. The tariffs target a lot of networking equipment used by prominent U.S. tech companies. And in a victory for Apple Inc., the administration removed smart watches and some other consumer electronics products. And China has retaliated in kind, hitting American soybeans, among other goods, in a shot at the president's supporters in the USA farm belt.

Trump continues to ratchet up pressure on Beijing to change its trade practices even as he floats the idea of talks. Fitbit shares closed down 1 percent on Monday.

Officials from the U.S. and China have met several times to address trade issues, most recently in August, but were unable to make much progress.

However, 297 categories were fully or partially removed from the tariff list originally proposed by the Office of the United States Trade Representative, after intense lobbying by U.S. businesses and about a week of public comment.

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In the minutes of its recent meeting, the Reserve Bank board cited the US-China trade war and said there were "significant tensions around global trade policy and that this represented a material risk to the outlook".

In a statement, Mr Trump insisted China's trade practices "plainly constitute a grave threat to the long-term health and prosperity of the United States economy". The levies focused on industrial products, not on things Americans buy at the mall or via Amazon.

"History is very, very clear that countries that pursue the most open markets are the ones that prosper the most and whose citizens' income increases the most", Smith said, adding that "mercantilism does not work".

By expanding the list to $200 billion worth of Chinese imports, Trump risks spreading the pain to ordinary Americans.

The impact of the new tariffs on foreign exchange trading was also limited, with the Chinese yuan 0.1% lower against the dollar. Many experts believe that the president's way of thinking about the deficit is wrong, and that a large deficit with China means that USA consumers are able to afford the latest high tech products.

The result could be higher prices for American consumers, because most companies are expected to pass on the cost to their customers.

Trump is due to make the announcement after the close of US stock markets, where major indices were already sinking sharply in anticipation of what could be a major escalation in the US-China trade conflict.

Other reports by GizPress

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