Published: Wed, August 08, 2018
Money | By Ethel Goodwin

Trump says tariffs working far better than anticipated

Trump says tariffs working far better than anticipated

As the numbers were released, Beijing warned it was ready to impose new tariffs on $60 billion in American products if Trump pressed ahead with plans to hit another $200 billion in Chinese goods with steep punitive duties. It said retaliatory duties of between 5 and 25 percent will be imposed on 5,207 products "if the US side persists in putting its tariff measures into effect".

"The US measures are indiscriminately violating the relevant rules and worldwide obligations of the World Trade Organization, further infringing the legitimate rights and interests enjoyed by China in accordance with the rules of the World Trade Organization and seriously threatening China's economic interests and security", China's Commerce Ministry said.

Other US goods targeted by China in the latest list include semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, iron ore, steel products, roasted coffee, sugar, foods containing chocolate, candies, and even auto windscreens.

That move was a response to the Trump administration's proposal of a 25-percent tariff on $200 billion worth of Chinese imports. The move was meant to bring China back to the negotiating table for talks over USA demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit.

Washington says its actions are aimed at correcting the level playing field because the USA suffers from a severe trade deficit in its business with China.

Trump also claimed that China was talking to the United States about trade, but he provided no details.

If China carries through on its latest threat, it will be imposing some form of tariffs on almost all of the $130 billion in goods it imports from the U.S.

On Friday, China announced it would impose additional tariffs on billions of dollars of American goods if Trump followed through on imposing additional tariffs on China. China continues to move forward while for USA farmers, the trade war has represented a major step backwards.

Among US products targeted in the latest Chinese salvo were a wide range of agricultural and energy products, including liquefied natural gas. US business and farm groups, which do extensive business with China, have complained for months about Trump's strategy, but there are no signs that the Chinese government is paying for a campaign in the United States.

Warning that China had "better take President (Donald) Trump seriously", Kudlow insisted the Asian giant "is in trouble right now - their economy is lousy, investors are walking out, the currency is falling".

Trump continued his focus on tariffs Sunday morning, tweeting that the duties are working "big time" and that imported goods should be taxed or made in the U.S. He also suggested duties will allow paying down "large amounts of the $21 trillion in debt that has been accumulated" while reducing taxes for Americans. On Friday, officials stepped in to cushion the yuan, which has been battered by trade tensions and was approaching the key level of seven to the dollar.

Hopes had been rising that Trump might drop his trade-war campaign after the president announced a deal last week with European Commission President Jean-Claude Juncker that would see the USA and EU cut tariffs and other barriers.

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

Tariffs on another $16bn worth of products are pending, the second part of tariffs on $50bn worth of imports that the U.S. announced in March.

The People's Daily editorial said the U.S. was "turning global trade into a zero-sum game" in the hope of forcing China to make a tremendous compromise. Wang said on Friday they did not get into details.

Trump's senior advisers, particularly White House National Economic Council Director Larry Kudlow and Treasury Secretary Steven Mnuchin, have said the White House's ultimate goal is to remove tariffs and trade barriers in a way that makes "free and fair trade", but Trump's message on Saturday evening was one of protectionism and economic restrictions, not open markets.

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