Published: Tue, September 18, 2018
Markets | By Otis Pena

China hits back by levying tariffs on US$60b of U.S. goods

China hits back by levying tariffs on US$60b of U.S. goods

'Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports, ' a statement from Trump warned.

President Donald Trump said he'll make an announcement on China trade after USA financial markets close Monday.

In an earlier round of tariffs on $50 billion of goods, the Trump administration removed proposals on flat-panel television sets for the final list in June.

USA stock index futures extended losses in post-market trading late Monday after President Trump announced a new round of tariffs on about $200 billion worth of Chinese imports.

However, senior administration officials told reporters the initial list announced in July was reduced by 300 product lines after the administration received 6,000 written comments from consumers and businesses.

"I will say right here on China, we are ready to negotiate and talk with China anytime that they are ready for serious and substantive negotiations towards free trade to reduce tariffs and non-tariff barriers".

Amid continued trade tensions with the world's second largest economy, Trump "has not been satisfied with the talks with China on this (and) my guess is announcements will be coming soon", economic advisor Larry Kudlow said on CNBC. "But, so far, China has been unwilling to change its practices".

A White House statement said tariffs would start at 10 percent and go into effect in a week, on September 24, before kicking into full gear at 25 percent at the start of the new calendar year.

The iPhone maker's shares were down 2.7 percent, providing the biggest drag on the Dow, despite earlier reports that the United States would spare some of its products in the latest round of tariff actions.

Trump's move means that America will now have tariffs on roughly half of its imports from China (which totalled over $500bn last year).

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Geng said he would not comment on "hypotheticals" such as what measures Beijing might consider apart from tariffs on US products, saying only that details would be released at the appropriate time.

Consumer safety products made in China, such as bicycle helmets sold by Vista Outdoor and baby auto seats and other products from Graco Inc also were taken off the list.

While Trump wants U.S. companies to shift their manufacturing from China and elsewhere to the United States, not only would that make the USA companies higher cost and less competitive in global markets but it could take years to build the manufacturing plants or re-engineer supply chains.

The Retail Industry Leaders Association pointed out that the new tariffs would still hit more than $1bn worth of gas grills from China, $843m worth of luggage and travel bags, $825m worth of mattresses, and $1.9bn worth of vacuum cleaners.

"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for United States consumers", Apple said in a letter.

This comes after President Trump proposed tariffs on an additional $200 billion worth of Chinese imports.

The lower tariff rate could soften the blow ahead of key USA congressional elections in November.

Stocks fell Monday as markets braced for major escalations in the US-China trade war.

'Only knowing the pain of fighting will stop the war and cause (the United States) to negotiate seriously, ' said Lou.

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