China's government has warned it will retaliate if Washington imposes new trade penalties following a report the Trump administration will propose increasing the tariff rate on an additional Dollars 200 billion of Chinese imports.
The higher tariff rate, if implemented, would apply to a list of goods valued at US$200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of U.S. tariffs on US$34 billion worth of Chinese electronic components, machinery, autos and industrial goods.
U.S. threats have escalated since, with the President saying he is ready to impose tariffs on all $500bn of Chinese imports. "Tariffs are an unacceptable gamble with the US economy and the stakes continue to rise with no end in sight".
Foreign Ministry spokesman Geng Shuang reiterated at a regular news briefing in Beijing that the US' efforts at "blackmail" would fail.
But what exactly prompted Trump to push for the sharp reset in Chinese tariffs?
The US imposed tariffs of 25 percent on $34 billion of Chinese products earlier this month, with plans to add another $16 billion of imports on Tuesday.
Then there is what China says and on Thursday, Beijing urged the United States to "calm down" and return to reason after news that Trump may hike the tariffs from 10% to 25%.
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"As regards the threat by the United States to upgrade the trade war, China is fully prepared and will introduce counter-measures to defend the country's dignity and the interests of the Chinese people, and defend free trade and the multilateral system", China's commerce ministry said on 2 August.
The ministerial talks provided a useful occasion to inform the EU's trade partners about the results of last week's meeting between Trump and European Commission President Jean-Claude Juncker, according to a commission official.
The U.S. had threatened an additional $200 billion with levies of 10%, a level the administration may raise to 25% in a Federal Register notice in coming days, one of the people said. "Now, the United States coerces and pressures others unilaterally". "The faster we get a deal with Mexico, the faster that relieves pressure on farm country", he said. It wants China to stop stealing US corporate secrets, abandon plans to boost its high-tech industries at America's expense and stop subsidizing Chinese companies with cheap loans that enable them to compete unfairly.
"It's very hard to see how this doesn't negatively impact all Americans in every walk of life", FDRA president and CEO Matt Priest previously told FN.
- Tariff increases from 10% to 25% follow CNY currency fall.