Trump makes good on threat - $200 billion in new tariffs on China

Hannah Rogers
July 11, 2018

American experts have been quick to slam the President's new rules and accused him of "punishing" ordinary American people.

The trade confrontation between Washington and Beijing has been escalating for months, despite Trump's repeated statements that he has a good relationship with China's President Xi Jinping.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, responded to Lighthizer's announcement with dismay.

The extra taxes were announced after Beijing immediately responded with its own tariffs of $34 billion on United States products.

They expect the tariffs to be implemented, which is likely to further escalate the trade war resulting in $US450 billion worth of United States tariffs.

Beijing has vowed to respond in kind to any USA trade action. 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.

The scenario will harm USA economic growth and boost inflation.

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Chinese tariffs have already taken a toll on USA exports such as soybeans, which raises questions about the possible political repercussions President Trump could face from farmers who supported him in the 2016 election.

More than 6,031 product lines are affected by the proposed tariffs, including seafood, fruits and vegetables, grains, tobacco, auto rearview mirrors and burglar alarms. A public hearing is scheduled for August 20-23.

He said last month: "China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology".

"Trump's escalation of trade hostilities makes it increasingly hard to envision an exit path from an all-out trade war".

In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said that the latest US proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the United States in the first half of this year.

"We expect this will have a meaningful impact on US consumer inflation as well as a meaningful drag on US GDP growth", he said in an interview, citing the Chinese government's pledge to retaliate against new US duties.

The ministry released no further details about how it would spread the financial relief or whether the aid would cover the total cost of losses, but analysts said the move suggests China could significantly increase its support for industries that stand to be bled by the commercial battle. China has vowed to retaliate dollar-for-dollar to any further USA tariffs.

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