US President Donald Trump's $200b tariffs to hit China, retaliation expected

US President Donald Trump's $200b tariffs to hit China, retaliation expected

House Ways and Means Committee Chairman Kevin Brady said Trump is clearly increasing the pressure on China to come to the table and begin a new trading relationship that is fairer to the American farmers, workers and businesses.

Trade tariffs have hit Chinese equities hard, with the country underperforming against other emerging markets since US President Trump approved the tariffs in the middle of the year.

A levy of 10 percent will be imposed starting from September 24 and will be escalated to 25 percent in 2019 if the U.S. does not receive what it considers to be a satisfactory agreement. Beijing pushed back, slapping tariffs on $50bn worth of American goods.

A broad, $23 billion category of internet-connected devices will remain subject to tariffs, but some products, such as smart watches, Bluetooth devices, and other consumer-focused technology products were removed following a lengthy public vetting period during which more than 6,000 comments were received.

"I feel China will respond quite quickly - there will be no way the current China not respond to a threat like this".

But the tariffs could also be expected to push up the price of some goods in New Zealand shops.

White House economic adviser Larry Kudlow speaks during a meeting of the Economic Club of New York in New York City, U.S., September 17, 2018. "And they can't take actions that entirely flout the rules of the worldwide trading system", the official said.

So far in an ongoing trade war, China has matched new United States tariffs on goods.

Mr Trump warned, in a statement, that if China takes retaliatory action against USA farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $US267 billion of additional imports".

"Investors are slowly starting to realise that these new tariffs could be extremely disruptive to the supply chain", said Art Hogan, chief market strategist at B. Riley FBR in NY. The Office of the US Trade Representative concluded after an investigation that China's tactics range from requiring US and other foreign companies to hand over technology in return for access to the vast Chinese market to outright cyber-theft.

Trump's tariffs on China raise costs and create uncertainty for companies that have built supply chains that span the Pacific Ocean.

USA trade actions against China will not work as China has ample fiscal and monetary policy tools to cope with the impact, a senior securities market official said.

"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly", Trump said in his statement.

"Although the Prime Minister is about to head off to NY that is not Washington - she is not visiting America, she is visiting the United Nations".

They also say USA economic growth and inflation are likely to have peaked this year, which could help to further turn the tide of market sentiment against the Dollar over coming months.

Talks between the European Union and Britain on Brexit are being conducted in a spirit of "good cooperation", said Michel Barnier, the EU's chief negotiator on the issue. The US is trying to negotiate a new North American trade deal even as it threatens to impose national security tariffs on imported automobiles, especially those from Europe.

If all of Trump's planned tariffs are applied, Monday's levies, plus the existing $50 billion and planned $260 billion in tariffed goods would cover and exceed all of the US' imports from China, a staggering $506 billion.

The Global Times, a foreign policy journal of the Communist Party-owned People's Daily, published an editorial Monday in which it claimed such a move would simply beget more retaliation.

The Government was also "participating at all levels in worldwide negotiations" to protect and improve the World Trade Organisation, he said. "We must strive for American ownership of American companies in China".

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