The China-US Trade War Might Go Beyond Tariffs Soon

Ivan Schwartz
September 25, 2018

"These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy", he said in announcing the tariffs last week.

But in a policy statement issued just hours after the dual tariffs took effect, Beijing accused Washington of using tariffs as a means of intimidating other countries to submit to US wishes on economic matters.

Although a senior White House official said last week the U.S. would continue to engage China "for a positive way forward", neither side has signaled any willingness to compromise.

Secretary of State Mike Pompeo seemed confident on Sunday, however, that the US would win any potential trade war with China.

"We're going to get an outcome which forces China to behave in a way that if you want to be a power - a global power - transparency, rule of law, you don't steal intellectual property", he said.

Beijing's latest tariffs include an additional 5 per cent duty on about 1,600 kinds of US products including computers and textiles and an extra 10 per cent on more than 3,500 items including chemicals, meat, wheat, wine and liquefied natural gas.

It leaves Beijing hitting $110 billion worth of USA goods, almost everything China buys from the United States.

USA activated tariffs on $200 billion in Chinese goods that have scuttled their bilateral talks. Beijing believes substantive negotiations will only be possible after the US midterm elections in November, Bloomberg News reported.

When the talks can restart completely would depend on the "will" of the United States, Wang said at a press conference.

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Previous talks in late August saw little progress.

It accused the United States of contradicting itself on trade policy and called for cooperation.

Trump has repeatedly threatened higher tariffs on the remaining Chinese imports should Beijing retaliate against Monday's round. It includes many food products, including seafood.

However, following complaints from thousands of USA firms - including powerhouses like Apple and Walmart - 300 product lines were dropped from the target list. The Trump administration exempted numerous other items from the new tariffs, including smart watches, Bluetooth devices, and infant auto seats.

The remark follows a string of inflammatory remarks from Chinese policymakers following the introduction of new tariffs on Chinese imports from the United States on Monday.

Among the USA items expected to be hardest hit, according to an analysis from the Trade News Centre, are printed circuit boards, desktop computers, computer parts and metal and wooden furniture.

The spiralling trade fight adds to the growing areas of friction between the rival powers.

China summoned the USA ambassador in Beijing and postponed military talks in protest against a U.S. decision to sanction a Chinese military agency and its director for buying Russian fighter jets and a missile system.

The US has approved a $456 million arms deal with Taiwan - a move one expert warns threatens to further inflame relations with China.

Other reports by GizPress

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