USA threatens to impose fresh tariffs on China

Chairman Xi speaks at the National People’s Congress in Beijing

Chairman Xi speaks at the National People’s Congress in Beijing

"As a result of China's retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports".

The abrupt escalation is "totally unacceptable", said a Commerce Ministry statement.

Some in the US business community, while rueing the damage caused by Trump's tariffs, privately say Beijing's recent emphasis on accelerating reforms may not be a coincidence.

Adding duties on another $200 billion in imports from China could meaningfully increase the effect of the trade war.

The foreign ministry described Washington's threats as "typical bullying" and said China needed to counter-attack to protect its interests.

On Wednesday, China's main stock index lost 1.8 percent and Japan's market benchmark fell 1.1 percent. That would make US exports more competitive and close the trade deficit.

The Trump administration is readying tariffs on another $US200 billion of Chinese imports - ranging from burglar alarms to mackerel - escalating a trade war between the world's two biggest economies.

This action follows tariffs of 25% imposed on $34 billion worth of Chinese goods, made effective July 6; flooring was not included on that list.

"Unilateral actions that alienate long-standing USA allies and close off the US market to the rest of the world are not a recipe for economic growth and prosperity and are very unlikely to change China's unfair practices", ACC said.

"The latest list of $200 billion of products to be subject to tariffs against China doubles down on a reckless strategy that will boomerang back to harm USA families and workers".

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Since China can not match the USA dollar for dollar on the latest tariffs, officials familiar with the plans told The Wall Street Journal that Beijing is looking to "hit back in other ways".

U.S. President Donald Trump is likely to publish this week a list of $200 billion in additional Chinese products to be hit with tariffs, possibly as early as later on Tuesday, an administration official said.

"The United States has unveiled the list of tariffs in an escalating manner".

Lighthizer said the initial $50 billion in US tariffs were aimed at goods that "benefit from China's industrial policy and forced technology transfer practices".

Trump has been receiving support for regulation of US businesses as well as domestic tax cuts from the US Chamber of Commerce but soon after Tuesday's announcement a Chamber spokeswoman states, "Tariffs are taxes, plain and simple".

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology", Trump said in June.

The prospect of a 10 percent tariff on Chinese furniture imports sent shares of online home store WayFair Inc down 2.9 percent, while shares of Restoration Hardware tumbled 4.3 percent. The proposed list of goods includes consumer items such as clothing, television components and refrigerators as well as other technology products.

The FTSE 100 finished 100.08 points or 1.3 percent lower and Germany's Dax fell 1.53 percent.

The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years.

Unfortunately for markets, no end is in sight, with further retaliatory levies nearly certain to be enacted by China in the coming days or weeks.

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