Trump to approve tariffs on US$50 billion in Chinese goods

US President Donald Trump Trump says he'll confront China

Many economists correctly argue that a trade deficit is not a good indication of how the USA economy is doing - especially given that the US trade deficit tends to rise when the economy is strong. For now, weeks of shuttle diplomacy between Washington and Beijing, in an effort to reduce China's massive goods trade surplus with the USA, have produced nothing - and the very products that China had pledged to buy more of will now be slapped with higher import duties instead.

"The U.S. has ignored China's resolute opposition and solemn representation, and has insisted on adopting behaviours that violate WTO rules", China's commerce ministry said.

"These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs", Trump claimed in a statement. Specifically, Beijing makes USA companies that want to do business in China jump through more hoops than domestic companies. The Chinese haven't issued a list but have stated it would be an identical 25% on $50 billion of American exports.

"While the end game is a compromise trade deal that meets US demands for stronger Chinese protection of intellectual property rights, the road to a trade deal has become very ugly", said Rajiv Biswas, APAC chief economist at IHS Markit in Singapore.

Earlier today China's foreign ministry said it would hit back Donald Trump's plans to plaster tariffs on its imports. Tariffs on any products added to the U.S. Trade Representative's list would be subject to a period of public feedback.

In addition to the $34bn in products the USTR had already listed, the trade bigwigs put out a second list [PDF] covering another $16bn worth of additional imports from China it is considering adding to the tariff list.

Trump announced in a statement on Friday that the U.S. would impose a 25-per-cent tariff on Chinese products that "contain industrially significant technologies".

Trump has triggered a trade war with Canada, Mexico and the European Union over steel and aluminum and has threatened to impose duties on European cars.

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Meanwhile, the English-language China Daily said it wasn't sure Trump would follow through, given his penchant for sweeping threats. Friday's salvos mark a significant step toward a full-blown trade war between the United States and China despite months of trade talks and negotiations in an effort to avoid that outcome.

China went on to call for other countries to join it in pressuring the end the trade war. Last year, Trump slapped tariffs on Canadian lumber, despite warnings from the construction industry that they would inflate the price of housing. It says it wants to stop the transfer of United States products and designs over to Chinese companies.

Those restrictions are aimed at stopping China from developing its own hi-tech industry with technologies acquired from the U.S. - one of Washington's long-standing complaints.

Beijing has reiterated that it will respond "appropriately" to any measures imposed by the US.

"I am concerned that these new tariffs will hurt American manufacturers, farmers, workers and consumers", he said.

And he warned that any retaliation by Beijing would trigger another round of tariffs on Chinese goods.

"President Trump is fixated with tariffs, which he believes he can wield freely; but there are grave consequences", said AAFA president Rick Helfenbein.

The productivity and robust sales of American agricultural products leave them in the cross hairs of anyone trying to gain leverage against the U.S.

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