China hits back at USA with $60bn tariff threat

06 August, 2018, 23:39 | Author: Eric Barnett
  • China threatens tariffs on $60 billion in US goods

China has once again threatened to slap retaliatory tariffs against the United States in response to the Trump administration's trade policies, this time targeting $60 billion in usa imports with tariffs ranging from 5 percent to as high as 25 percent.

That move was in response to the Trump administration's proposal of a 25-percent tariff on $200 billion worth of Chinese imports. That particular set of tariffs has not yet taken effect.

China has already retaliated against some of these measures.

Trump then threatened to slap a 10% tariff on another $200 billion worth of Chinese goods, again leading to a counter-threat from Beijing. A final decision on the tariffs isn't expected until September.

Retaliatory tariffs were necessary, China says, to "defend the dignity of the country and interests of its people" as well as "the mutual interest of all the countries in the world".

China has announced retaliatory tariffs on $US60 billion ($81bn) worth of USA goods ranging from liquefied natural gas (LNG) to some aircraft and warned of further measures, signalling it will not back down in a protracted trade war with Washington.


Friday's threat targeting a smaller amount of US goods reflects the fact that Beijing is running out products for retaliation due to its lopsided trade balance with the United States.

Trump continued his focus on tariffs Sunday morning, tweeting that the duties are working "big time" and that imported goods should be taxed or made in the U.S. He also suggested duties will allow paying down "large amounts of the $21 trillion in debt that has been accumulated" while reducing taxes for Americans.

China responded with tariffs on $3 billion worth of USA items, largely agricultural products and metal. Those tariffs have already started to affect some businesses, though only a small fraction of the USA economy is experiencing consequences. Last month, the International Monetary Fund warned that escalating trade conflicts following USA tariff actions on its trading partners threaten to derail the global economic recovery.

"The money comes after farmers, especially soybean growers, have felt the brunt of retaliatory tariffs placed on agriculture by China and other nations that the Trump administration has penalized with tariffs on imports", NPR's Brian Naylor reported. In negotiations with China, Trump's major request was a massive reduction in the bilateral trade deficit.

No cargoes at all have yet been booked for September, raising the possibility that China's imports of U.S. LNG will drop to zero, even though any tariff action still has to be implemented. Investment is down. Consumption is down. While denouncing the US leader's actions, Beijing is also using its media to calm markets and express concern about the impact on the Chinese economy. And so I'm going to make the case that they are in a weak economic position. "China trade dispute. They expect solid economic growth momentum amid policy fine-tuning", an article in the official English-language China Daily newspaper said, citing Chinese economists.

Speaking to Bloomberg TV yesterday, National Economic Council Director Larry Kudlow said: "We've said many times: no tariffs, no tariff barriers, no subsidies".

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