China hits back at USA with $60bn tariff threat

Late on Friday, China's finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, with the extra levies ranging from 5 to 25 per cent on a total value of goods less than half of that proposed by US President Donald Trump's administration.

The Commerce Ministry issued a statement saying the new duties would be applied if Washington pulled the trigger on President Donald Trump's threat to raise tariffs on $200 billion worth of Chinese goods.

The world's two biggest economies, USA and China, further escalated trade tensions last week.

The spat began in April with the Trump administration imposing tariffs on steel and aluminium imports into the U.S. from China, which also retaliated by imposing additional tariffs worth about Dollars three billion on 128 USA products.

Trump suggested that his use of tariffs has directly damaged the Chinese economy, something that he said would continue unless they agreed to his demands, which includes allowing more USA exports and investments.

The Chinese commerce ministry said it would charge duties on the $60bn (£46bn) of goods that America sends to China each year, in retaliation for the proposed increase in taxes from 10pc to 25pc on the $200bn of Chinese goods that America buys each year.

"Tariffs are working far better than anyone ever anticipated", Trump tweeted, citing losses in the Chinese market.

"China has to take necessary countermeasures to defend its dignity and the interests of its people."

Multiple protests in Iran over currency drop, economic woes
But Trump's withdrawal from the Iran deal has tanked its economy badly. Try respect: "for Iranians & for int'l commitments", he tweeted.

President Trump vowed Saturday to continue imposing tariffs as a central part of his economic agenda and called his critics "fools", pivoting sharply away from the free-trade message that senior advisers had tried to erect in recent weeks.

Today's threat targeting a smaller amount of USA goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.

"In addition to the tariffs impact, there might be some impact from front-loading of orders in previous months", said Betty Wang, Senior China Economist at ANZ in Hong Kong. It said the retaliatory duties of 25 percent, 20 percent, 10 percent or 5 percent on 5,207 products will be imposed "if the US side persists in putting its tariff measures into effect".

Yet while the Chinese public and private sectors invest in one another based on the principles of the cyclically prosperous market socialist model, the U.S. is now being forced to subsidise (aka pay) its own farmers whose industry has been partly stagnated during the early stages of the trade war on China. That's a negligible amount for China, which imported 17 million tons total a year ago, according to the US Census Bureau.

Beijing fought back with matching tariffs on the same amount of US exports to China.

Throughout all of this, the USA continues to criticise China's trade practices as "unfair" because of the domestic win-win relationship between central government and private producers.

The nationalist Global Times, responding in an editorial late on Sunday to White House economic adviser Larry Kudlow's remarks that China should not underestimate Trump's resolve, said China did not fear "sacrificing short-term interests". "Time will prove that the USA eventually makes a fool of itself", the Global Times said.

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