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Trump prepares more tariffs as China retaliates

14 May 2019

Beijing's latest retaliation against U.S. tariff hikes - an increase on US$60 billion (S$82.1 billion) of United States imports from June 1 - could leave China running low on ammunition in the trade war. "China should not retaliate - will only get worse!"

The latest bullets in the U.S.

Fox News' Lou Dobbs doubled down in defense of President Donald Trump's repeated falsehood that Chinese exporters and manufacturers are paying the costs of the growing number of tariffs his administration has placed on goods from that country, instead of United States consumers and businesses. Just $5 a month. "You had a great deal, nearly completed, and you backed out!" The paper said China wasn't to blame for the trade deficit and that USA companies were largely profitable in China. -China trade talks end without a deal. "Would be wise for them to act now, but love collecting BIG TARIFFS!"

The president suggested that manufacturers who make goods in China could shift production to other countries to avoid the tariffs.

A new aid program would be the second round of assistance for farmers, after the Department of Agriculture's $12 billion plan a year ago to compensate for lower prices for farm goods and lost sales stemming from trade disputes with China and other nations. After Friday's tariff increase, the United States now is imposing 25% taxes on $250 billion in Chinese goods.

Trump on Monday warned Beijing not to go too far in responding to USA trade actions after China rolled out its retaliation to his move to hike import duties on a separate US$200 billion tranche of imports from China last week.

The United States on Friday activated a new 25% duty on more than 5,700 categories of products from China, even as top Chinese and US negotiators resumed trade talks in Washington.

China has said it would impose higher tariffs on $60 billion of USA goods in retaliate against a US tariff hike on Chinese goods.

That paved the way for a positive start for the European trading session, with stock markets in London, Frankfurt and Paris 0.6% to 0.9% higher, while US stock futures rallied.

Major changes to Chinese law, enforced and monitored by another country is something China will never accept nor could it if it wanted to not only save face at home but overseas. The U.S. increases apply to Chinese goods shipped since Friday, and those shipments will take about three weeks to arrive at U.S. seaports and become subject to the higher charges.

"China's adjustment of tariff-adding measures is a response to US unilateralism and trade protectionism", China's State Council Customs Tariff Commission said.

China has said it will retaliate against any further increases in tariffs.

Global markets remain on red alert over a trade war between the two superpowers that most observers have warned could shatter global economic growth, and hurt demand for commodities like oil. The Shanghai Composite index slipped 0.2 percent while Japan's Nikkei gave up 0.6 percent.

China targeted the most vulnerable agricultural industries early in the trade war, hitting soybeans and pork with high tariffs in the spring and summer of 2018.

Bank of America Corp. analysts warn the U.S. S&P 500 could fall by 5 percent if the brinkmanship continues, with a further escalation of tariffs in the near term resulting in a potentially 10 percent decline. Trump sees himself as the ultimate dealmaker and might believe that he has to personally intervene to get Xi to budge.

The U.S. prepared to hit China with new tariffs even as President Donald Trump said he'll meet his Chinese counterpart, Xi Jinping, at next month's G-20 summit, an encounter that could prove pivotal in a deepening clash over trade.

Trump prepares more tariffs as China retaliates