China vows retaliation for US$200B United States tariff threat

A woman tends to a child near a promotional gimmick in the form of a bomb and the U.S. flag outside a U.S. apparel shop in Beijing

A woman tends to a child near a promotional gimmick in the form of a bomb and the U.S. flag outside a U.S. apparel shop in Beijing Credit AP

Trump has said he may ultimately impose tariffs on more than US$500 billion worth of Chinese goods - roughly the total amount of United States imports from China previous year.

Beijing warns of "necessary countermeasures" as Washington announces 10 percent tariffs on Chinese goods, upping the ante in its trade dispute with the Asian economic giant.

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms and increasing the stakes for lawmakers in Trump's Republican party facing elections in November.

The tech sector, more broadly, will suffer from tariffs due to the nature and complexity of the global supply chain that it relies on.

China's government has criticized the latest U.S. threat of a tariff hike as "totally unacceptable" and vowed to retaliate in their escalating trade war.

Stocks began to be traded lower today as a trade war between the U.S. and the other major economies became a reality after President Donald Trump unveiled new tariffs on Chinese goods.

The additional 6,031 product lines would be hit with a 10 percent tariff.

Farmer Terry Davidson walks through his soy fields July 6, 2018, in Harvard, Illinois, the same day China imposed retaliatory tariffs aimed at the U.S. soybean market.

China imported US goods worth $130 billion past year and Friday's tariff hike hit $34 billion of that, with another $16 billion cited for a possible increase.

On Tuesday, U.S. officials issued a list of thousands of Chinese imports the Trump administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum, prompting criticism from some U.S. industry groups.

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U.S. Trade Representative Robert Lighthizer said Washington did a thorough investigation to justify imposing tariffs on $50 billion worth of imports to compensate for the harm to the U.S. economy caused by China's unfair trading practices, including theft or forced transfer of American technology.

"For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition".

The Chinese commerce ministry has slammed the United States plan to impose tariffs on additional imports worth some $200 billion as totally unacceptable, promising a mirror response to defend its national interests.

China "cannot match fresh USA tariffs", Vishnu Varathan of Mizuho Bank said in a report.

On Wednesday, the MSCI's broadest index of Asia-Pacific shares outside Japan was down about 1 percent, while the main indexes in Hong Kong and Shanghai recovered somewhat after falling more than 2 percent.

The latest round of import taxes on Chinese goods has a two month public commentary period and the USA administration is being open about the fact that they expect China to discuss the move leading one to wonder if it will actually be imposed.

"But more tariffs like these will punish America's manufacturing workers - and could undermine our hard-won gains thanks to tax and regulatory reform".

'Tonight's announcement appears reckless and is not a targeted approach, ' Senate Finance Chairman Orrin Hatch said.

China slammed the US threat to expand tariff hikes to imports including apples, fish sticks and French doors as a "totally unacceptable" escalation of their trade battle on Wednesday and vowed to protect its "core interests". "It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokeswoman said. Both governments have raised tariffs on US$34 billion worth of each other's goods and already said they are considering additional charges on another US$16 billion.

South Korea's government has weighed in this morning, warning that its exports could be hurt by the escalating dispute between Washington and Beijing.

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