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White House tells China to fix trade practices

04 August 2018

Top White House economic adviser Larry Kudlow on Friday ridiculed China's threat of US$60 billion of retaliatory tariffs as "weak" and said the world's second-largest economy was in significant "trouble".

The retaliation stands to further inflame tensions between the world's two biggest economies and echoes China's response to the previous round of tariffs which took effect last month.

U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping on November 9, 2017, in Beijing.

The announcement comes after US President Donald Trump threatened to raise the proposed tariffs on $200 billion of Chinese exports from 10 percent to 25 percent. That threat is part of efforts to make it more painful for China "to continue their bad practices than it is to reform", US Commerce Secretary Wilbur Ross said Thursday on Fox Business Network.

The move comes after Trump asked U.S. trade officials to consider imposing a 25% tariff on $200bn of Chinese goods, up from the 10% level originally proposed last month, as the two countries attempt to reach an agreement on trade.

The U.S. hit back with tariffs on 1,300 Chinese goods worth $50 billion.

Officials, however, downplayed suggestions that 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.

President Donald Trump asked US Trade Representative to consider increasing the proposed tariffs to 25pc from the planned 10pc, USTR Robert Lighthizer said on Wednesday.

The latest round of USA tariffs would range between five per cent and 25 per cent and would hit 5,027 products - a variety of agricultural goods such as beef, as well as small planes, chemical components, textiles, liquefied natural gas and condoms.

"They better not underestimate President Trump's determination to follow through on our asks". The move was meant to bring China back to the negotiating table for talks over US demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit. China recently threatened to slap retaliatory tariffs on an additional $60 billion in US goods.

The two countries have not had formal trade talks since early June.

Washington and Beijing are locked in battle over American accusations that China's export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how. The inquiry found that Chinese theft of USA intellectual property was costing the US economy billions of dollars. It had also become the largest buyer of US crude oil outside of Canada, but Kpler, which tracks worldwide oil shipments, shows crude cargoes to China have also dropped off in recent months.

Other US goods targeted by China also included semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, beef, steel products and coffee.

White House tells China to fix trade practices