Published: Sat, August 04, 2018
Markets | By Otis Pena

Trump administration confirms plan to raise China import tariff to 25 pct

Trump administration confirms plan to raise China import tariff to 25 pct

Washington imposed additional 25 percent tariffs on $34 billion of Chinese goods July 6 in response to complaints Beijing steals or pressures companies to hand over technology.

"Certainly, we would like to see the playing field leveled", White House Press Secretary Sarah Sanders said in a briefing on Wednesday. The move would risk further escalation of tensions between Washington and Beijing which are already mired in a trade war.

The U.S. has said a second round on 16 billion dollars in Chinese imports could be implemented soon.

The GSO has however warned exporters and importers to be prepared for any eventuality given the ongoing trade war between the USA and China.

The $200 billion list of goods targeted for tariffs - which also include Chinese tilapia fish, printed circuit boards and lighting products - would have a bigger impact on consumers than previous rounds of tariffs.

Officials however downplayed suggestions the move was meant to compensate for the recent decline in the value of the Chinese currency, which have threatened to take much of the sting out of Trump's tariffs by making the imports cheaper.

China promptly promised it would take countermeasures of its own.

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China announced Friday it will put tariffs on $60 billion of USA imports if the US moves forward with 25% tariffs on $200 billion goods.

The higher tariff rate, if implemented, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of USA tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods. On Friday, Larry Kudlow, Trump's top economic adviser, warned China against pushing the president any further. After the earlier tariffs $34 billion of USA goods, about $120 billion is available for retaliation.

President Trump and the European Commission President Jean-Claude Juncker agreed last week to put their tariffs on hold while the two sides negotiate, including on the dispute over steel tariffs, which gives the USA more leverage to pressure China.

But China exports far more to the United States than the other way round, making it more challenging for the country to hit back against U.S. tariffs.

He said President Donald Trump directed him in June to identify $200 billion worth of Chinese goods for additional tariffs of 10 percent and he initiated the process on July 10.

Economic expansions tend to be cyclical, and even within each expansion there are spurts of rapid growth followed by more sluggish intervals, so the administration can not count on the recent spurt to be sustained.Businesses are already starting to report widespread increases in input costs, in part as a result of steel and aluminium tariffs.

U.S. President Donald Trump's administration is proposing a tariff rate increase on $200 billion worth of Chinese goods to 25 percent from 10 percent as the two countries continue conversations to determine whether trade talks can be resumed, senior Trump administration officials said on Wednesday.

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