Only 4 Days in, China-US Trade War Escalates

Only 4 Days in, China-US Trade War Escalates

On Tuesday, the Trump administration announced that it would assess an additional 10 percent tariff on up to $200 billion of Chinese goods.

Markets reacted this morning after the USA released a list of $200 billion in Chinese goods that could be hit by tariffs, which China promised to retaliate against.

The Trump administration said the proposed list, which would put 10 percent tariffs on thousands of different categories of Chinese imports, is needed to increase the pressure on Beijing to change what the us calls unfair trade practices.

The list is subject to two months of finalization and input before possible implementation by President Donald Trump.

TRT World's Kevin McAleese reports from Washington DC.

This round targets a larger number of consumer goods as varied as fish, luggage, tires, dog leashes, baseball gloves, furniture, clothing, mattresses, and some electronics.

U.S. Trade Representative Robert Lighthizer said the tariffs of 10 percent are "a result of China's retaliation and failure to change its practices" in response to earlier U.S. tariffs.

"Rather than address our legitimate concerns, China has begun to retaliate against U.S. products", Lighthizer said in a statement.

After the list was released, China's Commerce Ministry said in a statement that it could not accept the additional tariffs proposed by the United States, adding that it was "shocked" by the decision. High-level talks between the two countries starting in May failed to deliver a breakthrough to head off a trade war.

"This act is typical trade bullying", a spokesperson for China's Ministry of Commerce said in a statement.

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"It's already clear that this well-intentioned policy will actually make the United States less competitive, undermine this administration's vision of energy dominance and the manufacturing renaissance, and nearly certainly destroy many more jobs than it protects".

"This type of irrational behavior is unpopular", the statement said, adding China would tack on the case to its suit against the USA at the WTO.

Market drops started in Asia overnight, where all of China and Hong Kong's share indices lost more than 1%, and has spread to Europe as markets open here.

In New York, the Dow Jones industrial average ended down 219.21 points at 24,700.45. It's an extensive list of over 6,000 goods that include seafood, propane and toilet paper, among many other things.

In the USA, some lawmakers and business groups criticised the latest U.S. move.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, responded to Lighthizer's announcement with dismay.

Grassley said the Trump administration tariff fight has "a very detrimental effect on current markets" and that the impact is rippling through other industries in his state beyond agriculture.

"Tariffs are taxes, plain and simple".

"Given China's likelihood of retaliation, it's also billions worth of new tariffs on American exporters".

The President's tariffs are already squeezing some USA firms, which have started to raise prices or lay off workers as a result.

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