US President Donald Trump said on Thursday he would consider imposing additional tariffs on US$500 billion in Chinese goods if China retaliates.
US tariffs on $34 billion worth of Chinese goods becomes effective today while another US$16 billion are expected to take effect in two weeks
“You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump was quoted as saying in a Reuters report.
On Thursday, China said its tariffs on US good would take immediate effect after US duties on Chinese goods kick in.
English-language newspaper China Daily run by the Chinese government said in an editorial accused the US of blackmail and racketeering.
China’s Ministry of Commerce said in a statement that the US has violated World Trade Organization rules and ignited the largest trade war in economic history.
“Such tariffs are typical trade bullying, and this action threatens global supply chains and value chains, stalls the global economic recovery, triggers global market turmoil, and will hurt more innocent multinational companies, enterprises and consumers,” the ministry noted.
If the US moves forward with its threats on a further US$500 billion of Chinese goods, that would actually eclipse the total amount of Chinese exports to the US in 2017, said Nick Marro, Analyst at The EIU.
" We don't think that’s really feasible. However, US posturing hints that the economic relationship will get worse before it gets better and so we may not see a rebound towards diffusing this conflict for quite some time," he noted.
"It’s inevitable that Chinese authorities will ramp up regulatory pressure on US companies in China," Marro said. That’s essentially the most vulnerable US pain point right now.”