Trump May Raise Tariffs Further On Chinese Goods

China urges US to return to reason on trade says tactics won't work

U.S. President Donald Trump has proposed raising tariffs to 25% on a range Chinese products including fresh fruit and vegetables, in the latest development of the escalating trade war.

For the Trump administration, the possible bulk export of soybean to Europe has eased some pressure as the USA provides subsidies worth $12 billion for farmers, even though the hold on tariffs on European cars and auto parts while negotiating the best deal for a "zero-tariff" trade regime will increase the pressure on the U.S. automobile sector. "The 25 percent duty would be applied to the proposed list of products previously announced on July 10".

In a statement, Lighthizer said the proposed higher tariff is meant to provide the administration with additional options to encourage Beijing to change its trade practices.

The U.S. and China are in an escalating trade war that has already seen the two sides impose tariffs on roughly $50 billion of each other's goods.

Trump initially threatened to levy 10 percent on an additional $200 billion but that figure may now rise to 25 percent, sources told the Washington Post and Bloomberg.

In the end, it's most likely that only $100 billion of US imports and exports will ultimately face higher tariffs in the global standoff, says Moody's.

In early July, the United States government imposed 25 per cent tariffs on an initial $34 billion of Chinese imports. In a survey of global fund managers in July by Bank of America Merrill Lynch, 60% of respondents said that a trade war is the biggest threat to financial markets.

Mickey Kantor, who was USA trade representative under President Bill Clinton, warned that a trade war with China will take a toll on a US healthy economy that from April through June registered the fastest growth since 2014.

The highest penalties in Friday's list would hit honey, vegetables, mushrooms and other farm goods, targeting areas that supported Trump in the 2016 election.

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A spokeswoman for the U.S. Trade Representative's Office declined to comment on the proposed tariff rate increase or on whether any changes would alter the deadlines laid out for comment period before implementation. Economists warn that the tariffs will punish American firms that import goods such as plastics and semiconductors from China. In this scenario, to which Moody's assigns a 60% probability, US gross domestic product would be reduced by about 0.1 percentage point at the peak of the trade confrontation, in mid 2019.

Participants at the meeting in Geneva on July 31 said they are considering an array of options, including an appeal to the World Trade Organization's dispute settlement system and the imposition of retaliatory tariffs against US goods.

Foreign Ministry spokesman Geng Shuang reiterated at a regular news briefing in Beijing that the United States' efforts at "blackmail" would fail.

Trade tensions between the US and China have been escalating for months, driven by President Trump's aggressive rhetoric and policy positions.

Earlier on Wednesday, Congress passed legislation that will strengthen national security-related checks on Chinese investment in the U.S., a move that is also aimed at curbing China's ability to capture valuable American technology.

The U.S.is indeed impatient for an immediate solution, according to Jacob Parker, the vice president for China operations for the U.S.

The move is being fuelled by deep frustration within the Trump administration over its unsuccessful attempts to press China to change its trade practices, including improperly obtaining American intellectual property.

American companies have started to feel the pinch as well from global steel and aluminum tariffs and the first tranche of China-specific duties that cover just $US34 billion of imports.

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