United States unveils $200 billion list of China imports for tariffs

Blanche Robertson
July 12, 2018

But the USA action drew a swift reaction from the plastics and petrochemical industries, with the head of the Plastics Industry Association saying the tariffs would "boomerang" and hurt manufacturing.

The country's Commerce Ministry earlier threatened "comprehensive measures", which were feared to include harassing American companies in China.

The $200 billion far exceeds the total value of goods China imports from the United States, which means Beijing may need to think of creative ways to respond to such USA measures.

The first USA tariff list focused on Chinese industrial products, an attempt to reduce the direct impact on American consumers.

"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", Trade Representative Robert Lighthizer said in announcing the proposed tariffs.

Concerns such as government favouritism for domestic firms and pressure on US ones in strategically important sectors to transfer technology were "stoking demand for reciprocity in the US-China trading relationship, even if our members generally oppose the use of retaliatory trade tariffs", it added.

While China does not export enough goods to the U.S. to match the value of the announced tariffs, combining United States corporate revenue inside China with exports would give America a trade surplus of US$20 billion, according to research from Deutsche Bank cited by Bloomberg.

Concerns about the knock-on effect of the trade war spread on Thursday, with South Korea, Asia's fourth-largest economy, warning that components and materials - "intermediate goods" - used in home appliances, computers and communications devices could be caught in the crossfire.

FILE PHOTO: A worker helps load steel bars onto a truck at warehouse of the Baifeng Iron and Steel Corporation in Tangshan, Hebei province, China August 3, 2015.

"As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China's unfair trade practices and to China opening its market to USA goods and services", he added.

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The tariffs will not be imposed until after a two-month period of public comment on the proposed list.

If the United States were to impose tariffs on oil, USA oil sellers would have to look for other destinations and attract new customers, which could cost them more.

Some US business groups and senior lawmakers sharply criticised the latest action on Tuesday, with Senate Finance Committee Chairman Orrin Hatch, a Republican, saying it "appears reckless and is not a targeted approach".

'Tariffs on $200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families, ' trade lawyer Scott Lincicome said. Imposing taxes on another $200 billion worth of products will raise the costs of every-day goods for American families, farmers, ranchers, workers, and job creators.

They also said they remain open to working with China to try to resolve the dispute, but the response from Beijing so far has been unsatisfactory.

Chinese tactics, the administration said, include outright cybertheft and forcing US companies to hand over technology in exchange for access to the Chinese market. Both governments have raised tariffs on US$34 billion worth of each other's goods and already said they are considering additional charges on another US$16 billion.

"China's closest neighbors, namely Japan, Korea and Hong Kong, are most vulnerable to a U.S. -Sino trade war because they export mostly intermediate goods to China", OCBC said in a note.

TRT World's Kevin McAleese reports from Washington DC.

As its dispute with Washington deepened, Beijing has been calling on other countries to support global free trade and has talked up efforts to ease investment rules.

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