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Trump going ahead with taxes on $16B in Chinese imports

08 August 2018

China has vowed to strike back again, dollar-for-dollar, on the US$16 billion tranche.

The trade representative's office also accused China of "cyber intrusions into United States commercial computer networks to gain unauthorized access to commercially valuable business information".

The 25 percent tariffs also will apply to a broad range of Chinese electronics, plastics, chemicals and railway equipment that the Office of the U.S. Trade Representative (USTR) has said benefit from the "Made in China 2025" industrial plan, aimed at making China competitive in high-technology industries. Chinese imports of goods and services into the United States past year amounted to almost $524 billion.

Americans import far more from China than the other way around, however, meaning Beijing may at some point need to look for other means of retaliation. Since then, Washington and Beijing have raised the stakes by threatening more punitive trade measures in an intensifying dispute that has rattled financial markets anxious about the impact on investment and growth.

The Trump administration ramped up the pressure for trade concessions from Beijing last week by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.

After a strong start to the year, growth in the world's second-largest economy cooled slightly in the second quarter, partly hit by the government's years-long efforts to tackle debt risks.

In May, Chinese importers trying to beat Beijing's looming counter-tariffs led to a surge in USA exports of crude oil and soybeans, temporarily driving down the trade deficit and helping boost GDP growth in the April-June period to 4.1 percent.

The worry is that the escalating Sino-US trade war, rising corporate bankruptcies, and a steep decline in the value of the yuan versus the dollar could put a significant dent on the economy.

Chinese state media, reflecting the government's stance, has said China will not be cowed in the face of USA threats.

No date yet for the previously announced retaliatory tariffs on $16 billion in USA goods, which will largely target commodities.

John Neuffer, president and CEO of the Semiconductor Industry Association, said in a statement they were disappointed and puzzled why semiconductors remain on the final tariff list.

Trump going ahead with taxes on $16B in Chinese imports