US & China Trade War Escalates
September 24, 2018 – U.S. President Donald Trump’s administration invoked tariffs on an additional $200 billion in Chinese imports today, its most significant escalation yet in the trade war between the world’s two largest economies.
China immediately hit back, slapping additional tariffs on $60 billion in U.S. imports.
Washington, however, is unlikely to back down. Trump has threatened to impose duties on a further $267 billion in Chinese imports — effectively taxing everything Americans buy from China — if Beijing retaliated at the latest U.S. action.
The new U.S. levies, initially set at 10 percent, will rise to 25 percent from Jan. 1, ramping up pressure on China to change what Trump calls its “unfair” trade practices such as forcing American companies to surrender their technology in return for access to the Chinese market.
With the new tariffs, the United States is now taxing about half of the goods it imports from China each year.
The Trump administration had already imposed levies on a total of $50 billion in Chinese goods — $34 billion in July and $16 billion in August.
China retaliated with tariffs on an equal value of U.S. goods. But the number of American products available to tax is apparently dwindling because it imports about a quarter as much as it exports to the United States.
Speaking last week, U.S. Commerce Secretary Wilbur Ross said China is “out of bullets” to hit back “because its imports to the U.S. are nearly four times larger than the U.S. exports to China.”
While a series of U.S. tariffs were in response to China’s alleged intellectual property and technology theft, the duties are likely to hurt American consumers.
The $50 billion in the first round of tariffs fell mainly on industrial goods. But the latest tranche targets a wider range of products and could raise prices of consumer goods including electronics, tools, food and homewares.
The administration has removed smart watches, in a victory for Apple Inc., and some other consumer goods such as Bluetooth devices, bicycle helmets and certain chemicals from the final list of about 300 product categories.
Trump has demanded that China improve market access and intellectual property protections for American companies, remove industrial subsidies and cut its massive and chronic trade surplus with the United States.
Accusing China of having long taken advantage of the United States, Trump told reporters last week, “That’s not happening anymore. We can’t let that happen.”
At the same time, Trump said Washington remains open to talking with Beijing to negotiate an end to the tariff war.
The U.S. goods trade deficit with China totaled $375.23 billion last year, nearly half the U.S. trade deficit globally, according to U.S. Commerce Department data.
Businesses are pinning hopes of the standoff being defused in talks between Trump and Chinese President Xi Jinping later this year, possibly on the sidelines of a Group of 20 summit slated for Nov. 30-Dec. 1 in Argentina.