United States slaps tariffs on $200bn in China goods as trade war escalates

China warns it has no choice but to retaliate against the latest round of US tariffs but did not specify how. — Reuters pic

China warns it has no choice but to retaliate against the latest round of US tariffs but did not specify how. — Reuters pic

But they object to Trump's tactics and warn the dispute could chill global economic growth and undermine worldwide trade regulation.

The Trump administration is preparing to slap tariffs on an additional $200 billion in Chinese imports, with the final decision expected at the end of August.

U.S. companies have already said they are anxious about the effect of higher costs on their businesses and warned of the risk of job cuts.

The Trump administration said Monday that tariffs would start at 10 percent next week and increase to 25 percent starting January 1.

USA officials say those violate Beijing's market-opening commitments and worry they might erode United States industrial leadership.

The Chinese are expected to retaliate with commensurate tariffs on $60 billion in USA goods, and may withhold vital raw materials to United States firms.

In the minutes of its recent meeting, the Reserve Bank board cited the US-China trade war and said there were "significant tensions around global trade policy and that this represented a material risk to the outlook".

He also warned that if China retaliated then the U.S. would "immediately pursue phase three" which would mean imposing further tariffs with taxes on another $267bn worth of Chinese products.

"We have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies", the president said. "Once again, I urge China's leaders to take swift action to end their country's unfair trade practices", Trump said in a portion of the message more pointedly aimed at China.

"The administration has imposed tariffs on roughly Dollars 50 billion worth of Chinese imports already, in an effort to encourage China to alter its behaviour", the official said.

The products spared included consumer electronics like smart watches and Bluetooth devices, child safety products such as high chairs, auto seats and play pens, and certain health-and-safety products such as bicycle helmets, the officials said.

If he does go ahead with a further $267bn worth of tariffs, it would mean virtually all of China's U.S. exports would be subject to new duties.

It initially hit US stocks, Treasuries and the dollar while stirring a rally in Chinese equities [.SS] and the yuan.

China is one of Apple's largest markets, and the tech giant said increasing tariffs on Chinese goods could harm its business.

At the same time, the administration said it is still open to negotiations with China.

United States and China officials had discussed a new round of talks over the past week, but Mr Trump's latest move is likely to sour relations further. Mnuchin, meanwhile, is trying to get another round of direct official talks between the two governments to happen later this month.

"It will be a lot of money coming into the coffers of the United States of America", the president said at a Monday White House event, before officially announcing the additional tariffs.

"China may potentially pull out of trade talks entirely and escalate on the new front of outright export restrictions", analysts at JPMorgan told clients.

China's yuan currency slipped against the dollar on Tuesday after news of the US measures.

The U.S. Trade Representative's office eliminated 297 product categories from the latest proposed tariff list, along with some subsets of other categories.

USA business groups reacted angrily to the announcement, saying the tariffs would raise consumer prices and threaten jobs.

"This is the sixth or seventh time we talked about this particular round of tariffs", said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

"Most of our member companies are "in China, for China" - selling goods to Chinese companies and consumers, not to Americans - and thus ultimately boosting the US economy", Jarrett said.

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