Published: Fri, August 03, 2018
Worldwide | By Jermaine Blake

United States Tariff Plan Blackmail Won't Work, Says China

United States Tariff Plan Blackmail Won't Work, Says China

Reports cited unnamed sources familiar with the plan, which could be announced as early as Wednesday in Washington.

The proposal would require a more robust justification from the Department of Defense for "Section 232" tariffs such as those imposed on steel and aluminum imports and those now under consideration for autos. The Mexican negotiators are hoping to reach an agreement this month with the United States, then bring Canada back into the negotiations.

There have been no formal talks between Washington and Beijing for weeks over Trump's demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.

In 2017 the United States had a $376 billion trade deficit with China, which it is keen to reduce. The U.S. exports goods to China amounting to $130 bln, so it is unlikely that it will be able to respond with a proportionate expansion.

U.S. President Donald Trump walks from Marine One as he returns from Kansas City, Missouri, to the White House in Washington, July 24, 2018.

It's not as if the president doesn't have advisors capable of explaining the dangers of too much foreign investment-economist and Trump Trade guru Peter Navarro wrote an op-ed in the Wall Street Journal past year warning that at our current rate "foreigners will eventually own so much of the USA that Americans will wind up working longer hours just to eat and to service the debt".

China and the USA have raised tariffs on billions of dollars of each other's goods over complaints Beijing steals or pressures foreign companies to hand over technology.

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The proposed tariff increase poses big risks for both the US and global economy.

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. When Beijing immediately retaliated, Trump proposed additional taxes on $200 billion in importsーthis time affecting more consumer goods like furniture and computers.

Despite the current account deficit likely to be reported next week, and the potential for increased tariffs from the USA some observers still expect China to end 2018 with a trade surplus of approximately US$100 billion.

"The cost increases will be passed on to customers, so it will affect most Americans pocketbooks".

With Mr Trump now lining up tariffs affecting nearly half of the goods arriving from China, the mining sector, which relies heavily on solid growth in Asia's engine room, lurched into the red along with metal prices.

Officials, however, downplayed suggestions the move was meant to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Mr. Trump's tariffs by making imports cheaper. There will be a public hearing about the tariffs on August 20-23.

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