Markets

Trump's trade 'extortion' won't work, China state media says

Trump's trade 'extortion' won't work, China state media says

China on Friday announced new retaliatory tariffs against the United States on more than 5,000 US goods worth $60 billion if President Donald Trump follows through on a new round of tariffs he said he's considering.

In response to Donald Trump's indication that he would raise tariffs on over $200 billion of Chinese imports from 10% to 25%, Beijing in return stated that it is preparing retaliatory measures for tariffs on 5,207 different U.S. imports to China at variable tariff rates ranging from 5% to 25%.

The heated dispute between the world's two biggest economies has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent months.

China has either imposed or proposed tariffs on $110 billion in USA goods, representing the vast majority of its annual imports of American products.

After talks between Washington and Beijing broke down in May, some see this as the Trump administration's way of forcing China back to the negotiating table.

The Chinese Commerce Ministry said a decision to impose additional tariffs was made in response to U.S. plan to raise tariffs on Dollars 200 billion of Chinese goods from 10 per cent to 25 per cent, state-run Xinhua news agency reported.

China ran a $375 billion goods trade surplus with the United States in 2017, which Trump has said is unacceptable. Taken in totality, the new Chinese proposals will cover $60 billion in United States imports.

Still, despite the data, Trump reiterated in a tweet Sunday that his tariffs are working "big time".




The world's two biggest economies further escalated trade tensions last week, with China announcing possible additional tariffs late Friday in response to U.S. moves.

"China's countermeasures with differentiated tariff rates are rational and restrained, and were proposed after extensively soliciting opinions and careful evaluation". The move has prompted concerns of a global trade war as each nation has responded with retaliatory tariffs on USA products.

The latest volley in the trade row between the countries comes as Chinese leaders gather in the coastal resort of Beidaihe near Beijing for their informal, annual summit to discuss the domestic, economic and foreign policies of the coming year. The inquiry found that Chinese theft of US intellectual property was costing the USA economy billions of dollars.

China is trying to seek an "equal" position in future talks with the U.S. with today's retaliation announcement, said Gai Xinzhe, analyst at the Bank of China's Institute of International Finance in Beijing.

Trump also oddly boasted in OH that the tariffs would help the US pay off its $21 trillion debt (Trump is responsible for $1.9 trillion of debt).

U.S. Secretary of State Mike Pompeo, however, remained staunch on Washington's push for fairer trading conditions with China.

"Some of the currency fall though I think is just money leaving China because it's a lousy investment, and if that continues that will really damage the Chinese economy", Kudlow said in a Bloomberg Television interview Friday with Jonathan Ferro. The U.S. can buy more because the economy is strong.