President Trump escalated his trade war with China Tuesday, identifying an additional $200 billion in Chinese products that he intends to hit with import tariffs. That prompted fears Beijing, running out of imports for retaliation due to its lopsided trade balance with the USA, might try to disrupt operations of American automakers, retailers and others that see China as a key market.
It also includes consumer goods ranging from auto tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
"Rather than address our legitimate concerns, China has begun to retaliate against U.S. products".
China quickly responded by imposing tariffs on $34 billion in US products.
"Trump's escalation of trade hostilities makes it increasingly hard to envision an exit path from an all-out trade war".
The euro was flat at $1.1675 after shedding 0.6 per cent on Wednesday. "The proposed modification is to maintain the original $34 billion action and the proposed $16 billion action, and to take further action in the form of an additional 10 percent ad valorem duty on products of China with an annual trade value of approximately $200 billion", read the document published by the Office of the U.S. Trade Representative.
The new round of tariffs targets more than 6000 trade lines including a wide range of low-end manufactured products from handbags, textiles, tires, leather goods, ski gloves to refrigerators to TVs.
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Administration officials said a two-month process would allow the public to comment on the proposed tariffs before the list is finalized.
"US doesn't have and won't have a better ally than EU", European Council president Donald Tusk retorted in a message sent on Twitter.
"Tariffs are taxes, plain and simple". Tit-for-tat tariffs already are raising the cost of some goods, such as washing machines, while industry groups warn of potential price hikes for cars, electronics and other items.
"American families are the ones being punished". "Consumers, businesses and the American jobs dependent on trade, are left in the crosshairs of an escalating global trade war".
In commodities, U.S. crude futures inched up 0.25 per cent to $70.57 a barrel after tumbling 5 per cent the previous day as trade tensions threatened to hurt oil demand and news that Libya would reopen its ports raised expectations of growing supply.
His administration has already imposed tariffs on aluminum and steel imports from the EU, Mexico and Canada at the end of May, prompting Ottawa to retaliate in kind against some USA exports.
"In part because they have only limited ammunition and in part because it's still early in the process on the U.S. side", Mr Kuijs added.