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You're tariffed! Trump announces $200 billion tariffs on Chinese goods

18 September, 2018, 10:42 | Author: Shawna Walton
  • The Donald Trump administration is for the first time publicly planning for a trade spat that drags into 2019 and possibly beyond

Yesterday US President Donald Trump announced tariffs on $200 billion worth of Chinese goods in what the Washington Post described as "one of the most severe economic restrictions ever imposed by a US president".

Collection of tariffs on the long-anticipated list will start 24 September but the rate will increase to 25% by the end of 2018, allowing U.S. companies some time to adjust their supply chains to alternate countries, a senior administration official said.

In a statement, the U.S. president said further tariffs worth $267bn (£203bn) will be placed on Chinese imports if Beijing takes "retaliatory action against our farmers or other industries". "If countries will not make fair deals with us, they will be 'Tariffed!'".

Apple had said the U.S. tariffs would affect prices for a "wide range" of Apple products, including its Watch, in a letter commenting on administration proposals earlier this month.

The iPhone was not among the "wide range" of products that Apple told regulators would be hit by the $200 billion round of tariffs in a 5 September comment letter to trade officials.

Trump kicked off his trade war with China in March, imposing higher tariffs after an investigation by Trade Representative Robert Lighthizer had found that China used foreign ownership restrictions to require tech transfers from USA to Chinese companies, as well as conducting espionage to acquire intellectual property.

The US imports around $500 billion in goods from China.

Zarit said the Chinese government had plenty of measures to disrupt the operations of USA firms in China and Trump's hopes of bringing U.S. businesses back home were misplaced. "I think that kind of tactic is not going to work with China", Fang Xinghai, vice chairman of China's securities regulator, said at a conference in the port city of Tianjin.

By slapping an extra 10 percent tax now and raising it to 25 percent at the end of the year on thousands of Chinese goods, Trump is forcing Beijing officials to ease off on what he believes are predatory trade practices.

China has threatened to retaliate and pull out of negotiations if that happens. These new tariffs would reportedly take effect "within weeks".

"Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower United States growth and competitiveness and higher prices for USA consumers", Apple said in a letter commenting on the proposal. The lack of progress and collapse of that deal have made future negotiations more hard, as it's unclear who speaks for the USA administration and there's a lack of confidence that any deal will be honored.

Trump has also complained about America's gaping trade deficit - $336 billion a year ago - with China, its biggest trading partner.

According to a statement on the Ministry of Commerce website, Chinese Commerce Minister Zhong Shan held talks with representatives from six multinationals on Monday, promising them that China's market would be more open to them and that Beijing would enhance intellectual property protection.

Through July, the United States ran a US$233.5b trade deficit in goods trade with China, an 8 per cent increase compared with the same period in 2017.

The benchmark US 10-year note US10YT=RR last fell 1/32 in price to yield 2.9977 percent.

The U.S. economy appears strong enough to withstand damage from the tariff battle, he said. The very development of globalised production, which has raised the contradiction of the outmoded nation-state system with its rival great powers to a new peak of intensity, has laid the foundations for a planned world socialist economy.

His comments are likely to further rattle USA businesses, which have pleaded with the administration to abandon the tariffs and warned they will raise prices, cost jobs and hurt the US economy. China has said it will hit back.

But many everyday items such as suitcases, handbags, toilet paper and wool are included in this latest round of tariffs.

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