‘Totally unacceptable’: Beijing vows retaliation if U.S. taxes $200bn of Chinese goods

European exporters shift trade to avoid higher US tariffs

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The Trump administration announced Tuesday it is preparing a new package of tariffs targeting Chinese exports valued around $200 billion, the latest escalation in the trade war with Beijing.

The intensifying trade war between the world's biggest economies was also a drag on commodity markets. So far, the USA has raised tariffs, or import taxes, on shy of $40 billion of Chinese goods and it might be quintupling that before the end of September.

U.S. President Donald Trump and first lady Melania arrive on Air Force One at Beijing, China, November 8, 2017.

"This is going to drag on until they can all come to the table and agree to even the playing field".

It also includes consumer goods ranging from vehicle tyres, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

"Trade experts we have consulted point to the potential for anti-U.S. social media campaigns, delays or blockage of regulatory approvals, travel bans, investment restrictions, among other options", Raymond James analyst Ed Mills said in a report. Orrin Hatch, R-Utah, chair of the Senate Finance committee.

"The latest list of $200 billion of products to be subject to tariffs against China doubles down on a reckless strategy that will boomerang back to harm USA families and workers".

"Given China's likelihood of retaliation, it's also billions worth of new tariffs on American exporters".

"This new round of proposed tariffs takes the fight onto yet another level from which it is going to be hard for either side to make a graceful retreat", said Eswar Prasad, former head of the International Monteary Fund's China division.

This has raised concerns that China could retaliate with non-tariff trade measures. These tactics include the outright theft of trade secrets, government subsidies to homegrown tech firms and demands that USA and other foreign companies hand over technology if they want access to China's vast market.

US Trade Representative Robert Lighthizer said China's retaliatory tariffs were "without any worldwide legal basis or justification".

"It is totally unacceptable for American side to publish a tat in a way that is accelerating and escalating", the Chinese Commerce Ministry said in a statement, adding that the Chinese government "will be forced" to respond with "necessary countermeasures" to protect its "core interests". These groups and their GOP members of Congress - previously broadly supportive of Mr. Trump - have begun agitating for the President to ease up in his trade war. "But China's reaction to the USA tariffs could pose a far greater threat to the index in time".

In Asia, the Shanghai Composite closed 1.8 per cent down, Hong Kong's Hang Seng was 1.3 per cent down, and Tokyo's Nikkei fell 1.2 per cent.

"This disruptive approach to trade policy endangers the gains that the $404 billion plastics industry has made as a result of this administration's achievements on comprehensive tax and regulatory reform", said Bill Carteaux, president and CEO.

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

The National Association of Manufacturers also criticized the US decision, saying this latest round of tariffs could undermine the economic gains from the administration's tax and regulatory reform policies.

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