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New tariffs readied for Chinese goods

12 July 2018

The planned new tariffs follow the 25 percent imposed on $34 billion in Chinese products, which Beijing responded to by hitting the same amount of USA imports.

Beijing recently indicated that its response to more tariffs would include "qualitative" measures, which many analysts interpreted as creating regulatory hurdles or even stoking anti-US sentiment among consumers of United States products.

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

"While the trade conflict between the USA and China has had a limited impact so far, we can't rule out the possibility of a slowdown in the Chinese economy and a contraction in world trade should conflict grow and spread into the global market", Finance Minister Kim Dong-yeon said at a government meeting.

"The latest list of $200 billion of products to be subject to tariffs against China doubles down on a reckless strategy that will boomerang back to harm USA families and workers".

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

USA officials released a list of 6,031 Chinese product lines the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum.

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Trump has been considering tariffs against China since his officials concluded in March that Beijing violates USA intellectual-property rights, such as by forcing American firms to hand over technology.

South Korea's trade ministry said in a statement that the trade war could be "prolonged and spread", adding that it would prepare responses and scenarios to cope with the economic impact of the trade row.

China on Thursday said foreign firms operating in China would suffer in a trade war, urging US companies to lobby their government to protect their interests, and said no talks to end the impasse were now under way.

The initial United States tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers.

The Commerce Ministry on Wednesday gave no details, but Beijing responded to last week's United States tariff hike on $34 billion of imports from China by increasing its own duties on the same amount of American goods.

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

"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", US Trade Representative Robert Lighthizer said in an e-mailed statement.

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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.

Some U.S. business groups and lawmakers from Trump's own Republican Party were critical of the escalating tariffs.

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

"Unfortunately, China has not changed its behavior - behavior that puts the future of the USA economy at risk", he continues. "It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokeswoman said.

"In part because they have only limited ammunition and in part because it's still early in the process on the US side", Kuijs said.

China's exports have mushroomed since it joined the World Trade Organisation in 2001, making it the world's second-largest economy and prompting widening criticism in recent years from trading partners that it has unfairly used global trade rules to its advantage.

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New tariffs readied for Chinese goods