European exporters shift trade to avoid higher US tariffs

European exporters shift trade to avoid higher US tariffs

European exporters shift trade to avoid higher US tariffs

On July 10, U.S. Trade Representative Robert Lighthizer announced in a statement that U.S. President Donald Trump has "ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports". But China only bought about $135 billion in US goods a year ago, meaning it will run out of American products to tax before it matches Trump's latest move.

The move comes after the United States imposed 25% tariffs on Chinese goods worth $34 billion last Friday.

More than 6,000 items could be affected - including burglar alarms, vehicle tyres, handbags, baseball gloves, carpets, toilet paper, dog food, and hundreds of food products. It's a potential effect of a new round of tariffs the Trump administration is proposing to slap on Chinese imports as soon as September.

Hours after the announcement was released, China's Ministry of Commerce issued its own statement, expressing a "solemn protest" against the United States.

"The action came just days after Washington levied punitive duties on $34 billion worth of Chinese products, and Beijing vowed to retaliate with equivalent tariffs on American goods".

The administration says its tariffs are created to punish China for what it calls unfair trade practices, theft of intellectual property, and "forced technology transfers".

"The behaviour of the U.S. is hurting China, hurting the world and hurting itself", a spokesperson for China's commerce ministry said in a statement.

The tariffs are a "reckless strategy that will boomerang back to harm USA families and workers", French said.

China's government has criticised the latest U.S. threat of a tariff hike as "totally unacceptable" and vowed to retaliate in their escalating trade war.

The latest escalation in the trade dispute sent markets lower.

"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".

On Wednesday, China's main stock index lost 1.8 percent and Japan's market benchmark fell 1.1 percent.

"This type of irrational behavior is unpopular", the statement said, adding China would tack on the case to its suit against the U.S. at the WTO.

Experts have said that the outlook of the trade war depends on how China responds to the tariffs on its imports.

And now China is ready to slap tariffs on American goods like French doors. Read 'Shocked' by Latest U.S. Tariff Plan, Beijing Seeks Retaliatory Action here.

Gao Qi, a Singapore-based currency strategist at Scotia Bank, said that the absence of any planned trade negotiations to defuse tensions between the two governments was adding to investors' anxieties.

"China has no option but to fight fire with fire".

Mr Trump has threatened to tax $550bn (£415bn) in Chinese products - exceeding America's total imports from China past year. "So, now he's fighting two wars and that's a bit complicated", Tal said.

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