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United States imposes new $200bn tariffs on China

18 Septembre 2018

"We have no problem with China trying to grow its economy, trying to lift its people out of poverty, that's a good thing".

In Beijing, China's Foreign Ministry had already vowed to strike back.

President Donald Trump said the latest round of tariffs was in response to China's "unfair trade practices, including subsidies and rules that require foreign companies in some sectors to bring on local partners".

The United States will spare Apple's Watch and other consumer gadgets from the latest round of tariffs on Chinese goods, a senior administration official said in a last-minute reprieve for the technology industry on Monday (Sept 17).

The additional tariffs will be on top of $50 billion in tariffs on Chinese goods imposed in July.

The latest US duties spared smart watches from Apple and Fitbit and other consumer products such as baby auto seats.

Former chief economic adviser Gary Cohn tried desperately to convince Trump that tariffs would cost jobs and investment and raise little revenue, at one point telling him that he had a "Norman Rockwell" view of an American economy that bore no relationship to the services-dominated U.S. economy today.

In a statement Trump said the tariffs were the result of an investigation which found China had engaged in unfair trade and intellectual property practices for many years. The US also asserts that Beijing uses state money to buy American technology at prices unaffordable for private companies.

Trump initiated the fight to punish Beijing for what he says are China's predatory tactics to try to supplant US technological supremacy. Steve Mnuchin and Chinese Vice Premier Liu He, respectively, are scheduled to meet in Washington, DC, September 27-28.

President Donald Trump, to the alarm of United States trading partners, has kept his course of aggressive trade policy, imposing punitive tariffs on countries he accuses of cheating American workers. Trump added that if the Beijing government retaliates, he would pursue tariffs on another $267 billion in imports.

Turkey has in turn hiked tariffs on imports of several USA products such as rice, alcohol, leaf tobacco, cosmetics and cars.

Trump is due to make the announcement after the close of US stock markets, where major indices were already sinking sharply in anticipation of what could be a major escalation in the US-China trade conflict.

Tariff rate on $200 bln list will start at 10%, go up to 25% at end of year. But many analysts say his combative actions seem unlikely to succeed. China has said it will hit back.

He also warned that if China retaliated then the United States would "immediately pursue phase three" which would mean imposing further tariffs with taxes on another $267bn worth of Chinese products.

Still, he said, the USA economy appears strong enough to withstand the damage.

"In the short term, we will have higher prices and fewer jobs than we would have had otherwise", Sohn said.

The latest US move could generate a tit-for-tat response from Beijing, which has said it would welcome new trade talks with Washington, but also suggested it would not engage in more negotiations if the USA imposed the tariffs.

Speaking Sunday at an economics forum, Lou Jiwei, a former finance minister and chairman of China's sovereign wealth fund, said Beijing should disrupt supply chains of American companies that rely on China's vast manufacturing industries, the website Sina.com reported. "Such restrictions could even apply to Apple Inc.'s iPhones, which are assembled in the mainland, officials said, without elaborating", the report says. Some will likely move to other low-priced countries that aren't in the line of fire. Make your products in the United States instead of China. The Port of Baltimore is facing growing anxiety over the disruption to business despite being on track for a record year, said the Financial Times. "Now the calculus is more complicated".

United States imposes new $200bn tariffs on China