Published: Wed, August 08, 2018
Economy | By

China to hit US with tariffs on US imports worth $16bn

China to hit US with tariffs on US imports worth $16bn

China's Commerce Ministry called the USA decision to place the latest round of tariffs on Chinese goods "unreasonable", and said it chose to take counter measures, matching the tariffs in percentage and value.

China is imposing additional tariffs of 25 per cent on $16 billion USA worth of U.S. imports from fuel and steel products to autos and medical equipment, the Chinese commerce ministry said, as the world's largest economies escalated their trade dispute.

Washington already imposed 25 percent tariffs on $34 billion in Chinese products on July 6. Larger items are also on the list of 333 goods being targeted including large passenger cars and motorcycles as well as various fuels, and fiber optical cables.

The Asian economic powerhouse will add the tariffs on US imports to measure the same tax placed on their exports, CNBC said. As demand drops, USA stockpiles should build, pressuring prices.

While trade tensions are being ratcheting up, China's trade surplus with the USA stood at US$28.1 billion in July, close to the record-high in June, data released Wednesday showed.

The US will impose a 25% tariff on $16 billion worth of Chinese goods starting August 23.

President Trump had repeatedly expressed discontent over the USA trade deficit with China, accusing the country of unfair trade practices, intellectual property theft, currency manipulation, and of providing state aid to Chinese firms.

But there seems no solution at sight as the Trump administration prepares for tariffs of up to 25 per cent on an additional Dollars 200 billion in Chinese products.

China's exports grew faster than expected in July, while imports surged, showing both domestic and worldwide demand continue for now to shrug off the uncertainty of the trade conflict with the US.

Sales to the USA rose by 13.3%, while China's surplus with the States shrank marginally to $28.1bn (£21.7bn) last month from a record $29bn (£22.4bn) in June. Unipec and Sinopec are Asia's largest refiner and biggest buyer of USA oil.

China's final list announced on Wednesday differs from an earlier draft it published in June, which included crude oil.

In March 2018, the USTR had released the findings of its "exhaustive" Section 301 investigation that found China's acts, policies and practices related to technology transfer, intellectual property, and innovation are "unreasonable and discriminatory and burden USA commerce".

Wednesday's knee-jerk reaction to the announcement of the tariffs was a typical move by traders. However, lingering concerns over the sanctions on Iran and falling USA inventories should be supportive over the near-term. The markets will turn weaker if the tariff damage starts to show up in US inventories numbers, but since Chinese refiners had been limited buyers since early July, it may not show up in the numbers for weeks.

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