China Vows Retaliation for $200 Billion US Tariff Threat

But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.

"We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy".

The president last month asked the US Trade Representative's office to identify US$200 billion of Chinese goods that could be hit with 10 per cent tariffs.

The latest moves came last Friday when the Trump administration's tariffs on $34 billion worth of Chinese goods took effect.

Head of United States equity strategy at JP Morgan, Dubravko Lakos-Bujas, said: "Despite trade headlines, S&P 500 companies should deliver robust earnings on above-trend revenue growth and sharply higher margins". It's an extensive list of over 6,000 goods that include seafood, propane and toilet paper, among many other things. "There is no justification for such action".

The US is planning to implement 25 per cent tariffs on a further $US16 billion worth of Chinese imports within the next fortnight. Trump has said he may ultimately target more than $500 billion worth of Chinese goods - roughly the total amount of USA imports from China a year ago.

Instead, if Trump wants to solve the issue, he needs to "call up the Fed and tell them, 'Let interest rates find the right level, ' and we'll begin to adjust this problem over time", Stockman said.

Orrin Hatch, the Republican Senate Finance Chairman, condemned the move as "reckless" and not "targeted", while United States stock index futures fell in early Asian trading.

The government gave no details but the Commerce Ministry earlier threatened "comprehensive measures".

"If China does react with further escalation in tariffs, the USA equity market as well as the dollar-yen or Australian dollar could face further downward pressures", he said.

"Tariffs on $US200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families", said Scott Lincicome, a trade lawyer and senior policy analyst for the group Republicans Fighting Tariffs.

China bought $130 billion of US goods a year ago.

"Unfortunately, China has not changed its behaviour - behaviour that puts the future of the USA economy at risk".

The abrupt escalation is "totally unacceptable", said a Commerce Ministry statement. His determination to renegotiate trade deals has targeted not only competitors on the world market such as China, but longtime friends and allies such as the European Union or Canada.

(Copyright © 2015. All Rights Reserved.)
 
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