China announces $60B of USA goods for tariff retaliation

White House

White House

"U.S. pressure and blackmail won't have an effect".

The Financial Times estimates that should countries retaliate, the value of trade covered by the measures and countermeasures could reach more than $1 trillion (some 6% of world trade), which would derail global growth.

They include food products, chemicals, steel and aluminum and consumer goods ranging from dog food, furniture and carpets to auto tires, bicycles, baseball gloves and beauty products.

Experience shows that President Trump does not always follow through on everything he says or tweets. The Chinese "are not in good economic shape".

Officials, however, downplayed suggestions the move was meant to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Trump's tariffs by making imports cheaper. Democrats and Republicans have complained that China's ability to sell goods in the United States at a lower cost than US companies has put thousands of American firms out of business, costing manufacturing jobs and hurting the USA economy. It is also planning more spending on infrastructure to cushion the impact of trade tensions.

The theory states that if countries specialise in producing goods where they have the lower opportunity cost, there will be an increase in economic welfare and both countries will gain by trading with each other.

There are signs that his approach is not working the way he intended.

There was no immediate reaction from the Chinese government.

According to Bloomberg, sources familiar with the deliberations shared that the United States may impose additional levies to 25 percent in a Federal Register notice as early as today - a move that would come three weeks after the administration announced plans to slap 10 percent tariffs on the same amount of Chinese imports. To try to quell outrage from farmers, Trump last week announced $12 billion in emergency aid, including direct payments, for farmers who are expected to lose orders based on increased tariffs from China.

That fell apart shortly after it was announced by USA officials and amid acrimony in the negotiating team sent to Beijing due to disagreements over the concessions that would be made to China. "Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods", Ennis said. "The big picture of a trade war and protectionism is that it is a slow death - a death by a thousand paper cuts instead of anything sudden and shocking", said Richard Kelly, head of global strategy at TD Securities.

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Trump had said he would implement the $200 billion round as punishment for China's retaliation against the initial tariffs aimed at forcing change in China's joint venture, technology transfer and other trade-related policies. In fact, one reason the White House intensified its tariff threats this week is because some administration officials believe that China has intentionally allowed its currency to weaken in recent months, making it cheaper for its companies to export goods to the United States.

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

China promptly promised it would take countermeasures of its own.

The trade battle has business leaders on both sides anxious about where this will end up.

Businesses in the USA also want a slice of the growing market in China, which is ready to buy more to meet the growing demand from Chinese consumers, Mr Wang said.

Timing will depend on the actions of the United States, the Chinese Commerce Ministry said in a separate statement.

But if the White House thinks it is escalating from a position of strength, it probably also fears strength may not last forever and could diminish the longer the conflict lasts.

This article was written by Emily Rauhala and Damian Paletta, reporters for The Washington Post.

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