Trade tariffs will harm the world

Trade tariffs will harm the world

Earlier on Tuesday, the Trump administration unveiled a list of Chinese exports, worth some $200 billion, that it plans to slap with 10 percent tariffs. China announced a $3 billion list of USA goods including pork, apples and steel pipe on Friday that it said may be hit with higher tariffs.

The products include various food items, chemicals, minerals, tobacco, electronics and office goods. But it could interfere with American automakers and retailers who see China as a key market by regulating import licenses or investigating USA firms for tax, environmental, and antitrust concerns, according to the Associated Press.

Beijing on Wednesday vowed to take "countermeasures" after the announcement. President Donald Trump is threatening to impose the tariffs in retaliation for duties that China slapped on $34 billion of USA goods on Friday.

He said: "As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China's unfair trade practices and to China opening its market to us goods and services".

China' s Ministry of Commerce said that the tariffs are "totally unacceptable" and it is hurting the entire world, as well as China.

The administration will hold hearings on the proposed list late next month.

The earliest they would come into effect is September.

China's government has criticised the latest United States threat of a tariff hike as "totally unacceptable" and vowed to retaliate in their escalating trade war.

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The US government said it was readying new tariffs of 10% on $200 billion worth of Chinese goods, releasing a list including fruit and vegetables, handbags and baseball gloves.

Oliver Jones from Capital Economics has warned that China's response to Trump's latest tariff threat could hit the USA stock market hard.

It also said China would respond to the United States actions.

However, in a statement this morning the Chinese ministry of commerce hit back, saying: "China is shocked by U.S. behaviour". "Right now, world trade is relatively chaotic".

In financial markets, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5 per cent, while the main indexes in Hong Kong and Shanghai fell more than two per cent. "Imposing taxes on another $200 billion worth of products will raise the costs of everyday goods for American families". "This new round of proposed tariffs takes the fight onto yet another level from which it is going to be hard for either side to make a graceful retreat", said Eswar Prasad, former head of the International Monteary Fund's China division.

"China has no option but to fight fire with fire".

Asian stock markets fell sharply on Wednesday as investors shunned risk amid escalating trade tensions between the two economic giants.

The US complains that China uses predatory practices in a push to challenge American technological dominance. "So, now he's fighting two wars and that's a bit complicated", Tal said.

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