WASHINGTON, June 19 2018 : U.S. President Donald Trump yesterday threatened to impose a 10 percent tariff on $200 billion of Chinese goods, escalating a tit-for-tat trade war with Beijing.
In a statement, Trump said he had asked U.S. Trade Representative Robert Lighthizer to identify the Chinese products to be subject to the new tariffs. He said the move was in retaliation for China’s decision to raise tariffs on $50 billion in U.S. goods.
“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said.
Washington and Beijing appeared increasingly headed toward open trade conflict after negotiations failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.
On Friday, Trump said he was pushing ahead with a 25 percent tariff on $50 billion worth of Chinese products, prompting Beijing to respond in kind.
Trump said if China increases its tariffs again in response to the latest U.S. move, “we will meet that action by pursuing additional tariffs on another $200 billion of goods.”
A spokeswoman for the U.S. Trade Representative’s Office said that the new list of $200 billion in Chinese goods targeted for 10 percent tariffs would replace the previous $100 billion list that Trump ordered to be prepared in early April as a response to China’s first round of $50 billion in retaliatory tariffs.
Trump said he has “an excellent relationship” with Chinese President Xi Jinping and they “will continue working together on many issues.”
But, Trump said, “the United States will no longer be taken advantage of on trade by China and other countries in the world.”
Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, said China will soon run out of imports of U.S. goods on which to impose retaliatory tariffs, as it only imported $130 billion worth of American goods last year. It would likely next seek to punish U.S. companies doing business in China.
He added that China was unlikely to respond to an announcement of tariffs with changes in industrial policies. Those could take a long and painful trade fight.
“As I’ve said from the beginning, China will back off its industrial plans only when U.S. trade measures are large and lasting enough to threaten the influx of foreign exchange. Not due to announcements,” he said.
Meanwhile, China responded to Trump’s latest threat by pledging to take “qualitative” and “quantitative” measures.
Chinese goods, the commerce ministry said today in a statement on its website that China would take comprehensive measures to “fight back firmly”. – Reuters