China places tariffs on another $16B worth of USA goods

The White House reportedly had a private meeting with tech industry representatives last week.                  Daniel Terdiman  CNET

The White House reportedly had a private meeting with tech industry representatives last week. Daniel Terdiman CNET

USA president Donald Trump has threatened to target all $500bn of Chinese imports.

Amid a steep correction in crude prices, China said on Wednesday that it would impose a 25-percent tariff on U.S. imports worth US$16 billion, including crude oil, diesel, cars, coal, and steel products, in retaliation to the U.S. list of US$16 billion worth of Chinese imports that will be taxed by U.S. authorities from August 23.

A first tranche, on $34bn worth of goods, went into effect in July.

Falling within a list of $16 billion worth of traded items, the USTR pushed live its finalised tariff list on Tuesday, having tentatively published a 284 category proposal back in June.

But China exports far more to the United States than the other way round, making it more challenging for the country to hit back against U.S. tariffs.

Customs will begin collecting the duties on the products from 12:01 a.m. on August 23, the Ministry of Finance said in a statement on its website on Wednesday.

After complaints by Chinese leaders, Trump agreed to reverse a USA enforcement action that would have caused ZTE, a prominent state-owned telecom company, to go out of business.

China, on the other hand, argues that the tariffs violate World Trade Organization rules and only harm both countries.

It will be the second time the U.S. slaps duties on Chinese goods in about the past month, despite complaints by American companies that such moves will raise business costs and eventually consumer prices.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said the escalation "is just reminding investors that their trade war concerns are going nowhere anytime soon". But given the lack of talks and Trump's unclear goals, the trade war doesn't appear to be close to a resolution.

"We're in a little bit of a fight with China right now", Trump said, before adding that the two nations would end up with a "fantastic trading relationship".

This round of tariffs is the second to be imposed under the Trump administration, following an earlier round in which $34 billion of Chinese imports saw altered charges starting July 6th.

The Office of the U.S. Trade Representative says the tariffs are in response to China's "unfair trade practices related to the forced transfer of American technology and intellectual property". There is a mandatory 60-day comment period for industries to ask for exemptions from the tariffs.

The trade balance between the two countries, which is at the center of the tariffs tussle, continued to be in favor of China. Big-ticket USA items that are still not on any list are crude oil and large aircraft.

As additional trade deals are signed, the president predicted that economic growth would "go much, much higher", a view at odds with his own administration's forecasts.

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