Trump vows to impose tariffs on more Chinese goods

Irving Hamilton
August 8, 2018

The plan will impose a 25 percent tax on an additional $16 billion in Chinese goods starting August 23.

A weaker yuan, which marked its worst 4-month fall on record between April and July, may have taken the sting out of 25 percent tariffs on $34 billion exports to the United States.

The worry is that the escalating Sino-U.S. trade war, rising corporate bankruptcies, and a steep decline in the value of the yuan versus the dollar could put a significant dent on the economy. So far, despite the rhetoric, only $37bn worth of imports into China and the USA have actually been affected.

Americans import far more from China than the other way around, however, meaning Beijing may at some point need to look for other means of retaliation.

The Trump administration has maintained that the tariffs are necessary to force China into changing economic behavior it says harms the US.

After months of escalation, business communities in both countries are wondering when and how the trade confrontation will end.

It will be the second time the USA slaps duties on Chinese goods in about the past month, despite complaints by American companies that such moves will raise business costs and eventually consumer prices.

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The U.S. action that prompted the Chinese retaliation was the latest by President Donald Trump to put pressure on China to negotiate trade concessions, after Washington imposed tariffs on $34 billion United States in goods last month.

A list published by the U.S. Trade Representative's office indicated 279 import product lines for tariffs. There is a mandatory 60-day comment period for industries to ask for exemptions from the tariffs.

His administration confirmed that its trade assault would soon cover more than $50 billion of products from China.

May 19: After a meeting, the two countriesannounce the outline of a trade dealto avoid the tariffs. The move appears to wreck the nascent trade deal. "Of course, China will retaliate, probably dollar for dollar", Hufbauer said.

July 6:The first tranche oftariffs on $34 billion worth of Chinese goodstakes effect; China responds in kind.

A US-China trade war will reduce global output by 0.7% by 2020, with China's economy taking a 1.3% hit and US GDP dropping 1%, Oxford Economics said in a research note on Tuesday, before the new list was released.

Additionally, an executive from China's Dongming Petrochemical Group said at the time that he expected Beijing to soon impose the tariff on USA oil imports.

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