US has stepped up its trade war with China by issuing another threat of 10 percent tariffs on about $200 billion worth of imported goods from China. The announcement had a spiral effect on stock market in China and thus intimidated China to give a befitting reply. China has stated that it will take the matter to World Trade Organisation and has labelled US actions as totally unacceptable.
Beijing has further stated that it will reciprocate the unfair tariffs with qualitative measures. Latter may include increased inspections, consumer boycotts of US goods to extended delays for various kinds of approvals for US firms who are running businesses in China. Thus, the US firms do expect a heavy backlash if the tariffs come into force.
The new revised tariffs amounting to $200 billion overshoots the total value of goods which China imports from US. This implies that Beijing will have to consider better ways to respond to these. A huge list of Chinese imports has been prepared by the Trump administration under consideration for new tariffs. Latter includes products like tobacco, chemicals, car tyres, wood products, handbags, suitcases, coal, steel and aluminium, pet food, carpets, gloves, beauty products etc. Many industry groups in US have also criticised the move. The list will be open to public comments for a period of 2 years before coming into effect.
US Trade Representative while making the announcement said that US administration has been highly patient with China and has been urging it continuously for putting an end to its trade practices and indulge in fair competition. He added that Chinese retaliation to the tariffs is completely unfair as it should have addressed the US concerns.
US has recently issued 25 percent increased tariffs on Chinese imports worth of $34 billion. The move was immediately retaliated by Beijing with matching tariffs. Both the countries are considering further $16 billion tariffs on goods.
The trade war has sent the investor sentiment to new lows the effect of which could be seen on stock markets across the world.
Many US lawmakers even from the Republican Party were against the tariffs. Even the US Chamber of Commerce which has supported the Trump administration’s domestic cut in taxes and other efforts to bring down regulation of businesses has not come forward to stand behind the latest tariffs.
The recent moves also confirm the commitments made by President Trump during his election campaign to act tough on China for its unfair trade practices and other theft of intellectual property. Ever since China entered the World Trade Organization, it has become the second largest economy of the world. China has also called on other nations to support free trade.