President Trump has proposed that US trade officials raise tariffs on Chinese goods from 10 percent to 25 percent over a perceived failure to address concerns regarding unfair trading practices, officials said.
The U.S. trade war with China just got kicked up another notch.
It would represent a ramping up of pressure over Washington's trade standoff with Beijing. "If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights", Chinese Foreign Ministry spokesman Geng Shuang said. "But dialogue must be based on mutual respect, equality, rules and credibility", said Geng.
In a sign the trade standoff is reverberating through Chinese politics, the Politburo signaled on Tuesday that policy makers will focus more on supporting economic growth amid risks from a campaign to reduce debt and the dispute with Trump. "We have been very clear about the specific changes China should undertake".
The public comment period on the U.S. tariffs aimed at $200 billion ends August 30 after public hearings August 20-23, according to the U.S. Trade Representative's office.
Camuñez notes that the Trump administration has given mixed signals about how tough it's willing to be with China, and that has complicated efforts to resolve the conflict.
Chinese equities and the yuan extended losses Wednesday afternoon, gaining downward momentum as concern over possible higher US tariffs overwhelmed optimism about Beijing's pledge to support economic growth.
U.S. trade representative Robert Lighthizer.
The US is upset that China chose to adopt a retaliatory strategy in a tit-for-tat response. "Now, the United States coerces and pressures others unilaterally". A 25% tariff would boost the cost of a range of USA imports at a time when inflation has begun to pick up. The implementation could be delayed for weeks as the administration works out the details of which products it will target. Beijing immediately imposed retaliatory levies in the same amount on USA imports.
"China's trade abuses need to be addressed, but tariffs are not the answer", the National Retail Federation said.
So what does the Chinese side think of the U.S.'s proposed escalation?
Earlier this year Trump implemented tariffs on China, the European Union, Mexico and Canada, saying it was the surest way to secure improved trade deals.
US and Mexican negotiators are meeting in Washington Thursday and Friday to work on a rewrite of the North American Free Trade Agreement - an effort that looked virtually dead a few months ago.
Beijing warned the threats will only be counter-productive for ongoing trade negotiations.
The FTSE 100 suffered a second day of sharp decline as Donald Trump rolled the dice to force China back to trade talks.
So far, the United States has imposed duties on $34 billion (26.10 billion pounds) of imports from China as part of a first tranche of sanctions on $50 billion of goods.