USA escalates trade war with new $200 billion China tariff list

China urges domestic firms to boost non-American imports as trade war with US escalates

China urges domestic firms to boost non-American imports as trade war with US escalates

Scott Lincicome, a trade lawyer for the group Republicans Fighting Tariffs, said tariffs on $200 billion would amount to a "multibillion-dollar tax on American businesses and families" and prompt China to retaliate against American exporters.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5 percent.

The US on Tuesday published a list of $200 billion (€170 billion) worth of Chinese goods that could soon be hit with tariffs. But China only bought about $135 billion in USA goods past year, meaning it will run out of American products to tax before it matches Trump's latest move. Beijing immediately retaliated with similar duties on US exports.

The fight with China comes as Mr. Trump is also locked in a trade war with Canada, Mexico, the European Union and other US allies.

Chinese tariffs have already taken a toll on US exports such as soybeans, which raises questions about the possible political repercussions President Trump could face from farmers who supported him in the 2016 election. "Given China's likelihood of retaliation, it's also billions worth of new tariffs on American exporters".

The Retail Industry Leaders Association, a lobby group representing the largest USA retailers, said: "The president has broken his promise to bring maximum pain on China, minimum pain on consumers".

American experts have been quick to slam the President's new rules and accused him of "punishing" ordinary American people.

"We encourage companies to optimize the structure of imports, increase imports of soybean, agricultural products, as well as seafood and cars from other countries and regions", said the ministry, explaining that the measures are aimed at mitigating the effects of the trade war with the United States. The official added that China has warned the USA that future actions would be met with "economic attacks" on American markets.

Initiating the latest tariffs as a supplemental action means they could be implemented before September, pending the results of a hearing on August 20-23.

In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said that the latest US proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the United States in the first half of this year. Beijing has vowed to retaliate dollar-for-dollar. "Right now, world trade is relatively chaotic". Regardless of the outcome, United States shoppers are poised to be losers, despite assurances from the administration that the new tariffs take into account the potential impact on consumers.

Although it was not a direct reaction to the new move from Trump's administration, the official English-language newspaper China Daily said in an editorial that Beijing had to stand up to Washington. "This new round of proposed tariffs takes the fight onto yet another level from which it is going to be hard for either side to make a graceful retreat", said Eswar Prasad, former head of the International Monetary Fund's China division.

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