Newly announced tariffs against China face vehement backlash

Newly announced tariffs against China face vehement backlash

However, should China retaliate - Bloomberg headlines suggest there will be retaliatory tariffs launched simultaneously - then all Chinese imports into the United States will face tariffs.

After a public comment period, the administration said Monday that it had withdrawn some items from its preliminary list of $200 billion in Chinese imports to be taxed, including child-safety products like bicycle helmets. But if the administration enacts the additional tariffs it would engulf all remaining United States imports from China and Apple products like the iPhone and its competitors would not likely be spared.

China will levy tariffs on about $US60 billion ($A83 billion) worth of USA goods in retaliation for the latest round of United States tariffs on Chinese products, as previously planned, but has reduced the level of tariffs that it will collect on the products.

Economists at UBS Group AG say even a 10 percent tariff would slow the United States economy in the fourth quarter by enough to stop the Federal Reserve hiking interest rates again in December.

The US and China have already placed penalties of $50 billion on each other's goods, with Beijing focusing on agricultural goods like soybeans, pork and dairy products that affect American farmers, who represent much of Trump's political base.

According to official figures, U.S. goods and services trade with China totalled an estimated $710.4 billion in 2017 of which U.S. exports were $187.5 billion and imports were $522.9 billion.

Lam Research Corp, a company that makes gear for manufacturing chips, said in a September 6 letter to trade regulators that duties on raw silicon, ceramic machinery parts and other items "add costs to our US manufacturing operations and reduce our competitiveness in the global semiconductor manufacturing market". The government responded by expanding fiscal spending and loosening monetary policies.

In the first two rounds of tariffs, the Trump administration took care to try to spare American consumers from the direct impact of the import taxes.

While US inflation has continued to rise steadily albeit modestly, firms across the country report lost businesses, layoffs and possible bankruptcies as input costs rise and exports fall. "This is lower than any other president at this stage in his presidency in the past 70 years and these latest trade protection measures could be seen as an effort to bolster his standing".

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In May, in fact, it looked briefly as if Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He had brokered a truce built around Chinese promises to buy enough American farm products and liquefied natural gas to put a dent in the trade deficit.

"China has had many opportunities to fully address our concerns", Trump said in a statement released Monday evening by the White House.

So far, the US-China trade talks have led nowhere and neither side appears willing to back down.

Separately, in a tweet before his announcement, Trump wrote: "Tariffs have put the U.S.in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been nearly unnoticeable". We remain open to negotiations.

"Tensions in the global economic system have manifested themselves in the US-China trade war, which is now seriously disrupting global supply chains", the European Union Chamber of Commerce in China said in a statement on Tuesday. But the root of the trade dispute is that China's reform is lagging behind its development, creating a "reform deficit".

The rate is less than half of the 25 percent level the administration had initially been considering.

The US Trade Representative's office eliminated 297 product categories from the latest proposed tariff list, along with some subsets of other categories. "It's a little disappointing earlier tariffs have not resulted in more constructive dialogue", Mr. Ross said.

President Trump also said that the U.S. has become a "piggy bank" to the world "ripped off by everyone".

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