Trade war ramps up as US threatens $200bn in Chinese goods
WASHINGTON, July 11, 2018 (News Wires) - The United States and China have fired the next shots in their escalating trade war, with Washington threatening to impose fresh tariffs on another $200 billion in Chinese goods and Beijing vowing to retaliate.
The latest moves in the ballooning trade conflict between the world's top two economies came just days after tit-for-tat duties on $34 billion in goods came into effect.
Analysts have warned that spiralling trade tensions between the two powerhouses could have a damaging impact on the global economy and far-reaching consequences across the planet.
US Trade Representative Robert Lighthizer late Tuesday accused China of retaliating to its tariffs "without any international legal basis or justification."
President Donald Trump has therefore ordered the trade department to "begin the process of imposing tariffs of 10 per cent on an additional $200 billion of Chinese imports," Lighthizer said in a statement.
Officials will hold hearings in late August on the list of targeted products and an administration official said it would take about two months to finalise, at which point Trump would decide whether to go ahead with the levies.
The eventual goal is to impose tariffs on 40 per cent of Chinese imports, the same proportion of US goods hit by Beijing's retaliation, an official told reporters.
If the measures are imposed, it would mean new taxes on thousands of products from fish to chemicals, metals and tyres.
Reacting to the "totally unacceptable" Washington list, the commerce ministry in Beijing said it would be forced to take "countermeasures."
"The behaviour of the US is hurting China, hurting the world, and hurting itself," the ministry said in a statement, saying it was "shocked" by the US actions.
"In order to safeguard the core interests of the country and the fundamental interests of the people, the Chinese government as always will have no choice but to take the necessary countermeasures," it added.
Beijing said it would "immediately" tack on the case to its suit against Washington's "unilateralist" behaviour at the World Trade Organisation.
At a forum in Beijing, a senior official accused the US of "damaging the world economic order" and said tit-for-tat tariffs would "destroy" trade between the rival powers.
"The outburst of large-scale mutual levying of tariffs between China and the United States will inevitably destroy Sino-US trade," said assistant minister of commerce Li Chenggang.
The dispute comes on top of Washington's confrontation with other allies and major trading partners including Canada, Mexico and the European Union, after it imposed steep tariffs on their steel and aluminium. Those nations have also retaliated.
The new trade frictions sent investors running for cover, with equity markets across Asia tumbling more than one per cent.
The benchmark Shanghai Composite Index led the declines, dropping 1.76 per cent. Hong Kong's Hang Seng Index dropped 1.29 per cent while Tokyo's Nikkei was off 1.19 per cent.
"The market didn't expect the second round of tariffs would come so quickly and it has impacted investor sentiment," said Zhang Gang, analyst with Central China Securities.