Economy

Shares knocked lower after new U.S. tariff threat on Chinese goods

Shares knocked lower after new U.S. tariff threat on Chinese goods

Trump, in a statement announcing the new round of tariffs, warned that if China takes retaliatory action against USA farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

China said it will impose tariffs of 5 percent to 10 percent on $60 billion worth of US products, starting on Monday.

China's retaliatory tariffs, ranging from 5 per cent to 10 per cent on more than 5,000 items, will take effect on Sept 24, China's Ministry of Finance said in a statement posted on its website.

Beijing has warned that it would hit an additional US$60 billion (NZ$92 billion) in American goods if Trump ordered more tariffs.

"The U.S. economy runs on pro-growth policies, but that's not what tariffs on 200 billion dollars worth of Chinese goods deliver", he said.

Trump also threatened to inflict more economic pain in the form of additional tariffs if Beijing takes any retaliatory action.

The administration is targeting a variety of products - from sockeye salmon to bamboo mats - forcing USA companies to scramble for suppliers outside China, absorb the import taxes or pass along the burden to their customers.

Trump slaps fresh tariffs on $200B of Chinese goods
The benchmark US 10-year note US10YT=RR last fell 1/32 in price to yield 2.9977 percent. The dollar index.DXY fell 0.46 percent and the euro EUR= rose 0.48 percent to $1.1684.

It is also the biggest set of tariffs to date, and unlike the earlier rounds this latest list targets consumer goods, such as luggage and furniture.

"Once again, I urge China's leaders to take swift action to end their country's unfair trade practices", Trump said.

The higher import taxes will apply to more than 5000 items, marking the biggest round of USA tariffs so far.

"We were trying to do things that were least intrusive on the consumer", US Secretary of Commerce Wilbur Ross said yesterday on CNBC.

"But, so far, China has been unwilling to change its practices", he said.

USA trade officials held public hearings in late August on the proposed escalation, hearing from dozens of American businesses hoping to be exempted.

The Commerce Ministry gave no details of a possible response to US tariffs imposed in the fight between the two biggest global economies over Beijing's technology policy.

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"Ongoing uncertainty about trade policy had led to volatility in the prices of some commodities", the board's minutes said.

There was no word on whether China would back out of trade talks it said it was invited to by the USA, but a Chinese Commerce Ministry statement said the US increase "brings new uncertainty to the consultations".

"This is not an effort to constrain China, but this is an effort to work with China and say, 'It's time you address these unfair trade practices that we've identified that others have identified and that have harmed the entire trading system, '" the official said. Tariffs would make it more expensive to develop and release new products, and if those costs aren't passed on to consumers, a company will either have to watch its profit margins dwindle or stop making affected products entirely.

Its decision to retaliate against the latest salvo from Trump raises the prospect of further escalation in the trade war.

Trump added. Trump won the 2016 presidential contest with strong support from those farmers and blue-collar voters.

People who claimed that imposing trade tariffs on China would not hurt the US economy were "fooling themselves", Susan Schwab, who served as the US Trade Representative in the administration of former US President George W. Bush, told an event hosted by the Centre for Strategic and International Studies on Monday.

Kudlow declined to specify details of the expected announcement but noted that reports indicating Trump will unveil 10 percent duties on $200 billion in imports are "more or less correct". Millions of iDevices are exported from manufacturers in China each year, and Chinese government officials have explicitly suggested that those products could be casualties in the trade war.

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Warnings were issued about the risk of life-threatening flash flooding in parts of North and SC as well as in Virginia. The deadly Tropical Storm Florence is so ferocious, it's uprooting everything, even tightly-bolted historic statues.


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