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China Vows Retaliation If Trump Slaps Further Tariffs On Chinese Imports

By Steve Wynne-Jones
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China Vows Retaliation If Trump Slaps Further Tariffs On Chinese Imports

China has said that "blackmail" won't work, and that it would hit back if the United States takes further steps to hindering trade, as the Trump administration considers slapping a 25% tariff on $200 billion worth of Chinese goods.

The proposal would increase the potential tariff rate from the 10% that the administration had initially put forward on 10 July for that wave of duties, in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said earlier this week.

Range Of Products

The tariffs target thousands of Chinese imports, including food products, chemicals, steel and aluminium, and consumer goods ranging from dog food, furniture and carpets to car tyres, bicycles, baseball gloves and beauty products.

While the duties would not be imposed until after a period of public comment, raising the proposed level to 25% would escalate the already bitter trade dispute between the world's two biggest economies.

The source said that President Donald Trump's administration could announce the tougher proposal as early as Wednesday in Washington. The plan to more than double the tariff rate was first reported by Bloomberg News.

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China, which has accused the United States of bullying, again vowed to retaliate if Trump proceeds with the measures, warning that pressure tactics would fail.

No To Blackmail

"US pressure and blackmail won't have an effect. If the United States takes further escalatory steps, China will inevitably take countermeasures, and we will resolutely protect our legitimate rights," Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing.

Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent US business groups, while weary of what they see as China's mercantilist trade practices, have condemned Trump's aggressive tariffs.

Representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice-Premier Liu He have been speaking privately, as they seek to restart negotiations to defuse the budding trade war, Bloomberg reported, citing sources.

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A spokeswoman for the US Trade Representative's Office declined to comment on the proposed tariff rate increase, or on whether any changes would alter the deadlines laid out for the comment period before implementation.

Asked about communication between the two countries on the dispute, Geng said that China had "always upheld using dialogue and consultations to handle trade frictions", but that dialogue must be based on mutual respect and equality.

"Unilateral threats and pressure will only produce the opposite of the desired result," Geng said.

Americans' Pocketbooks

In early July, the US government imposed 25% tariffs on an initial $34 billion of Chinese imports. Beijing retaliated with matching tariffs on the same amount of US exports to China.

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Washington is preparing to also impose tariffs on an extra $16 billion of goods in coming weeks, and Trump has warned that he may ultimately put them on over half a trillion dollars of goods – roughly the total amount of US imports from China last year.

The $200 billion list of goods targeted for tariffs, which include Chinese tilapia fish, printed circuit boards, and lighting products, would have a bigger impact on consumers than previous rounds of tariffs if implemented.

Erin Ennis, senior vice-president of the US-China Business Council, said that a 10% tariff on these products is already problematic, but more than doubling that to 25% would be much worse.

Passed On To Consumers

"Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods," Ennis said. "The cost increases will be passed on to customers, so it will affect most Americans' pocketbooks."

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Trump had said that he would implement the $200 billion round as punishment for China's retaliation against the initial tariffs aimed at forcing change in China's joint-venture, technology transfer and other trade-related policies.

He has also threatened a further round of tariffs on $300 billion of Chinese goods.

The US Trade Representative's office initially had set a deadline for final public comments on the proposed 10% tariffs to be filed by 30 August, with public hearings scheduled for 20-23 August.

It has typically taken several weeks after the close of public comments for tariffs to be activated.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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