Trump claims China tariffs successful

The Donald Trump administration is for the first time publicly planning for a trade spat that drags into 2019 and possibly beyond

The Donald Trump administration is for the first time publicly planning for a trade spat that drags into 2019 and possibly beyond

With Monday's announcement, roughly half of the US$505b in goods that Americans buy annually from Chinese firms will face new import levies.

Beijing has warned that it would hit an additional $60 billion in American goods if Trump ordered more tariffs.

Starting September 24, American importers will pay an extra 10 per cent tariff for the affected items, rising to 25 per cent at the end of the year, according to senior administration officials, who briefed reporters on the condition that they not be identified by name.

In a statement, the U.S. president said further tariffs worth $267bn (£203bn) will be placed on Chinese imports if Beijing takes "retaliatory action against our farmers or other industries".

President Donald Trump is expected to hit China with a tariff on another $200 billion worth of Chinese goods.

After a thorough study, the USTR concluded that China is engaged in numerous unfair policies and practices relating to United States technology and intellectual property? such as forcing United States companies to transfer technology to Chinese counterparts, he said.

"Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection", Mr Trump said in a statement.

What's behind the US-China rift?

China is reviewing plans to send a delegation to Washington for fresh talks in light of the US decision, the South China Morning Post reported on Tuesday, citing a government source in Beijing, raising the risk of a prolonged trade battle between the world's largest economies that could hit global growth.

This will allow U.S. companies some time to adjust their supply chains to alternate countries, a senior administration official said.

On Wall Street, all three major indices were solidly in the red toward 1930 GMT and word of the fresh round of tariffs had already sent Chinese stocks tumbling more than one percent, with the benchmark Shanghai Composite Index falling to 2,651.79, the lowest level since 2014.

Republican party United States lawmakers urged the Trump administration to pursue negotiations with China to resolve trade differences, while applauding Trump's tough stance on Chinese intellectual property and trade practices.

The President's decision threatens to upend the possibility of a diplomatic breakthrough with Chinese negotiators.

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File photo showing US President Donald Trump with Prime Minister Justin Trudeau during the G-7 summit meeting in Quebec, on June 8, 2018.

In a pair of early morning tweets on Monday, Trump hailed his combative trade policy as a boon to American economic health and said the United States steel industry, which the White House has championed in new protectionist measures, was now "the talk of the world".

He said China had to agree to some of the White House's demands for any progress to be made.

At the same time, the administration said it is still open to negotiations with China. The rand has fallen almost 10 per cent since the previous Monetary Policy Committee meeting in July and while the Reserve Bank does set a target level for the currency, the likely impact of the rand's decline on inflation could prompt the bank to lift the country's interest rate.

Officials said they wanted to shield consumer goods from the taxes as much as possible.

"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower United States growth and competitiveness and higher prices for U.S. consumers", Apple said in a letter.

Initial reaction from the business community Monday was unfavourable.

Economists warn the tariffs could chip away at USA economic growth.

The week started with early morning tweets from Trump claiming the cost increases due to the tariff spat have been "unnoticeable" and any country not making fair deals will be "tariffed".

American businesses have come out strongly against the tariffs, saying they have the potential of raising retail prices. In a win for Apple, consumer electronics like smartwatches and bluetooth devices were removed.

China's yuan currency slipped 0.3 per cent against the USA dollar in Asian trade on Tuesday. He has not been satisfied with the talks with China on this.

Harley-Davidson will have to bump up the Chinese price of its iconic motorbikes at least 20 percent, a store representative in Beijing said. "I think that kind of tactic is not going to work with China", Fang Xinghai, vice chairman of China's securities regulator, said at a conference in the port city of Tianjin. "There's no way around it".

Clearly the trade war will continue deep into 2019.

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