United States imposes new $200bn tariffs on China
- Lucas Bell
The tariffs will begin at 10% and go up to 25% starting on January 1 - prices will subsequently increase for a number of consumer goods ranging from handbags to bicycle tyres.
So far, the United States has imposed tariffs on $50 billion worth of Chinese products to pressure China to make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies.
The European Union trade chief said the tariff issues between the two should be resolved through the World Trade Organization.
China is the largest exporter by far to the US of the rare earth elements, accounting for about 60 per cent of the US$234.4 million worth of materials imported to America previous year, according to data from the US International Trade Commission.
The iPhone was not among the "wide range" of products that Apple told regulators would be hit by the $200 billion round of tariffs in a September 5 comment letter to trade officials. Those goods will now be taxed 10 percent.
Beijing vowed to fight back this time with more tariffs by canceling trade meetings scheduled for this week, imposing retaliatory tariffs and using other measures, including restricting sales of products and materials key to the USA manufacturing.
"Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower United States growth and competitiveness and higher prices for USA consumers", Apple said in a letter commenting on the proposal.
"China needs to show that it will stand up to Trump and the United States in order to demonstrate to the rest of the world that it is now America's rival", said Shaun Rein, managing director at the China Market Research Group in Shanghai.
"We have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies", the president said.
The two countries are fighting over Beijing's ambitions to supplant American technological supremacy.
The U.S. Trade Representative's Office past year concluded that China engaged in numerous unfair policies and practices relating to the theft of U.S. technology and intellectual property, including forcing American companies to transfer technology to Chinese counterparts as a condition for doing business in China.
"They want to make a deal", Trump said.
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Trump has also complained about America's gaping trade deficit - $336 billion past year - with China, its biggest trading partner. But Trump quickly backed away from the truce.
The levies focused on industrial products, not on things Americans buy at shopping centres or via Amazon.
By expanding the list to $200 billion of Chinese products, Trump may spread the pain to ordinary households.
"While the United States tariffs salvo is hardly middling, it's not as bad as it could have been, so unless China hits with draconian measures, markets should remain supported after this morning's knee-jerk reactions", said Stephen Innes, head of Asia-Pacific trading at OANDA.
The new tariffs - likely to be at 10 per cent - will apply to more than 1,000 products including smartphones, toys and TVs, which in turn will lead to higher prices for American consumers.
The USTR estimated that Chinese theft of intellectual property cost US companies between $225 billion and $600 billion annually. But many analysts say his combative actions seem unlikely to succeed.
Trump warned that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".
"Lou Jiwei's approach would feed the most hawkish sentiments in the US government", the person said, declining to be identified given the sensitivity of the matter.
No items were added, the officials said. "Fortunately, the USA economy is humming, so we don't have to worry as much about what this will do to our economy".
Earlier US Commerce Secretary Wilbur Ross said that it was up to China to take the next steps on trade talks with the US.
On the contrary, Trump has picked fights with each of those trading partners - from imposing tariffs on imported steel and aluminum to demanding that Mexico and China transform the North American Free Trade Agreement into a deal more favourable to the United States.
New Zealand faces risks rather than opportunities from the Trump administration's escalating trade war with China, Trade Minister David Parker and his National Party counterpart Todd McClay are forecasting. Some will likely move to other low-priced countries that aren't in the line of fire.
"But they have a lot of other options - they can target specific American firms, they can block exports to the U.S. entirely".
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