Published: Tue, May 14, 2019
Finance | By Loren Pratt

China will raise tariffs on some U.S. goods from June 1

China will raise tariffs on some U.S. goods from June 1

"Investors are increasingly anxious an anticipated second-half profit rebound may now evaporate as President (Donald) Trump's threat to tariff the remaining US$325 billion in Chinese imports would disproportionately target consumer products like iPhones, thereby posing a greater threat to the consumption-driven USA economy", said Alec Young, managing director of global markets research at FTSE Russell.

China's finance ministry said it plans to set import tariffs ranging from five percent to 25 percent on 5,140 U.S. products on a target list worth about $60 billion.

"China's adjustment of tariff-adding measures is a response to U.S. unilateralism and trade protectionism", the statement said, adding that it hoped the USA would work with China towards a "win-win agreement".

China on Monday announced tariff increases on US$60b of United States imports.

"We are determined and capable of safeguarding our legitimate rights and interests", Foreign Ministry spokesperson Geng Shuang said.

The U.S. Trade Representative's office Monday released a list of about US$300 billion worth of Chinese goods including children's clothing, toys, cell phones and laptops that Trump has threatened to hit with a 25 per cent tariff.

"The economic conflict widens as the two sides struggle to strike a new trade agreement".

President Donald Trump's trade war with China has taken a toll on the USA stock market. Very bad for China, very good for USA!

Trump started raising tariffs last July over complaints China steals or pressures companies to hand over technology. His comments came after the U.S. more than doubled tariffs on $200bn (£15.4bn) of Chinese goods on Friday. It also would turn the president's trade wars into a tangible reality for many Americans and their pocketbooks as he seeks re-election.

However, U.S. negotiators pushed too hard. Trump said on Monday his administration was planning to provide about $15 billion to help farmers whose products might be targeted.

In a series of tweets on Monday, Trump said China had "taken so advantage of the U.S. for so many years".

Last week, the Illinois Farm Bureau voiced concern about the effect of renewed tensions between the USA and China.

The trade war escalated on Friday after Trump hiked tariffs on $200 billion worth of Chinese goods, saying China had reneged on earlier commitments made during months of trade negotiations. Analysts have warned that failed trade talks and the deterioration in relations will put a dent in the USA and China's economic prospects.

Top White House economic adviser Larry Kudlow said on Sunday there was a "strong possibility" Trump will meet China's Xi at a G20 summit in Japan in late June.

Vice Premier Liu He, China's top economic adviser, sought to defend the changes in talks with senior USA officials in Washington on Thursday and Friday, arguing that China could accomplish the policy changes through decrees issued by its State Council, or cabinet, sources familiar with the talks said.

US officials said the Chinese negotiators have been reversing themselves on commitments made in earlier trade talks. Consumer spending accounts for more than two-thirds of US economic activity.

The same however can not be said for developing nations caught in the crossfire of the trade war that Trump has instigated between the world's largest and second-largest economies.

Like this: