China promises fast response as Trump readies tariffs

China promises fast response as Trump readies tariffs

China promises fast response as Trump readies tariffs

President Trump warned in March that the USA may choose to impose $50 billion in tariffs on Chinese goods, citing China's unfair trading practices, intellectual property practices and forced transfer of technology. "Bloomberg Economics' immediate assessment is that this would be a drag for both countries, but - absent an outsize impact on confidence - one that would be hard to discern in the aggregate growth or inflation numbers". "I'm not going to get out ahead of the announcement", she said.

The goods on the list targeted specific industries that China identified as part of its Made in China 2025 plan.

China had previously said it would respond to American tariffs on $50 billion worth of Chinese exports with retaliatory tariffs on $50 billion of USA products such as cars, planes and soybeans.

Trade tensions between the world's two largest economies have been steadily escalating over recent months as Trump began tariff fights with long-standing USA allies Canada, Mexico and the European Union over steel and aluminum production.

"We made clear that if the USA rolls out trade sanctions, including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect", foreign ministry spokesman Geng Shuang said Thursday.

The White House has declared that by June 15 it would announce its final list of $50 billion in Chinese products that would be subject to 25% tariffs under Section 301 of the Trade Act of 1974.

The trade tensions - simmering ever since Trump became president - appear set to escalate at an inopportune time for China's economy.

The president said that the United States will pursue additional tariffs if China retaliates "such as imposing new tariffs on United States goods, services or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China".

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"My great friendship with President Xi of China and our country's relationship with China are both very important to me", Trump said in a statement. The move is aimed at cutting the United States trade deficit with China.

The trade spat could boost prices for raw materials and food, leading to higher rates of inflation and a potential recession, according to Gary Cohn, Trump's former top economic adviser. "This situation is no longer sustainable".

Speaking alongside U.S. Secretary of State Mike Pompeo in Beijing, Chinese State Councillor Wang Yi said there were two choices when it came to trade.

The tariffs, which Trump set in motion in March, are a response to China's practice of compulsory technology licensing for foreign companies and its efforts to steal US trade secrets via cybertheft, administration officials have said.

"Moving forward with tariffs on goods imported from China will harm US consumers and businesses, and will fail to change China's discriminatory and damaging trade practices", Dean Garfield, CEO of the Information Technology Industry Council (ITI), said in a statement last month.

China has pledged that any tariffs will void progress made in recent trade talks between Beijing and Washington, and has drawn up its own list of $50 billion in U.S. goods to target.

Trump's approval in this regard followed a 90-minute meeting he had with Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and US Trade Representatives Robert Lighthizer yesterday.

China has pledged a tit-for-tat response.

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