Published: Thu, July 12, 2018
Global News | By Blake Casey

Markets hit as Trump threatens new tariffs on China

Markets hit as Trump threatens new tariffs on China

The previous round of tariffs: The Trump administration last week imposed 25 percent tariffs on $34 million in Chinese goods, prompting Beijing to impose retaliatory tariffs of the same amount on United States imports.

The Trump administration on July 6 imposed 25 per cent duties on US$34 billion in Chinese imports, the first time the president has implemented tariffs directly on Beijing after threatening to do so for months.

"For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition", Lighthizer said.

Beijing "never yields to threat or blackmail" and will retaliate against the "groundless" tariffs, China's Vice Minister of Commerce Wang Shouwen said in written comments to Bloomberg.

His administration has already imposed tariffs on aluminum and steel imports from the EU, Mexico and Canada at the end of May, prompting Ottawa to retaliate in kind against some United States exports.

The move drew immediate condemnation from Senate Finance Chairman Orrin Hatch, a Republican from Utah, who called it "reckless" and not "targeted".

Chinese tactics, the administration said, include outright cybertheft and forcing USA companies to hand over technology in exchange for access to the Chinese market.

The U.S.is pursuing a new set of tariffs that would hit $200 billion in Chinese goods, according to senior administration officials.

The prospect of a 10 percent tariff on Chinese furniture imports sent shares of online home store WayFair Inc down 2.9 percent, while shares of Restoration Hardware tumbled 4.3 percent.

Trump has been following through on pledges he made during his 2016 presidential campaign to get tough on China, which he accuses of unfair trade practices including theft of intellectual property and forced technology transfer that have led to a $375 billion US trade deficit with China.

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In Trump's first round of tariffs, China accounted for 20 percent of total USA imports, meaning that substitutes were readily available.

US President Donald Trump ordered his government to prepare tariffs on a further US$200bn of imports from China on Monday.

China's WTO "trade policy review" - scheduled before Washington lit the fuse on a tariff battle with Beijing - served as a new front in the widening economic confrontation between the two powers.

The trade war anxiety extended to China's yuan. These tactics include the outright theft of trade secrets, government subsidies to homegrown tech firms and demands that USA and other foreign companies hand over technology if they want access to China's vast market.

"Concerns over trade and trade wars are really having an adverse effect, less so on the USA markets than the worldwide markets, but it is certainly taking a bite".

And now China is ready to slap tariffs on American goods like French doors.

"Our president is going to keep fighting for trade deals that are free and fair and reciprocal", Pence said.

"The President has broken his promise to bring 'maximum pain on China, minimum pain on consumers, ' and American families are the ones being punished", Hun Quach, RILA VP of global trade, said in a statement.

China's commerce ministry said it was "shocked" by Washington's latest move, which comes just days after both countries imposed tit-for-tat tariffs on $34 billion of each other's goods, and ups the ante in a heated trade dispute that has rattled global financial markets.

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