USA considers hiking China tariffs to 25 percent

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USA considers hiking China tariffs to 25 percent

Last month, Washington and Beijing imposed a first round of 25 percent tariffs on 34 billion dollars worth of each other's goods.

Trump set his sights on China during the 2016 presidential campaign and has followed through during his presidency with a protectionist strategy that he says is aimed at strengthening US companies and boosting jobs at home.

"These [10%] duties, if applied, would cause disproportionate economic harm to United States interests", he stressed in testimony to USA trade officials, adding that any escalation would be catastrophic for U.S. companies.

"The US side has repeatedly escalated the situation against the interests of both enterprises and consumers", the Chinese Commerce Ministry said in its statement.

Trump believes that the gulf between how much China exports to the United States and how much the United States exports to China reflects unfair trade practices, which he has vowed to address through penalties on imports and a range of other measures.

A second round of tariffs on products worth $16 billion could take effect as soon as this week.

Last month, Trump threatened to impose tariffs on all goods imported from China.

"I need to stress that dialogues must be conducted on the basis of mutual respect and equality", he said.

China immediately vowed to retaliate though at the same time urged the U.S. to act rationally and return to talks to resolve the dispute.

'If we're going to use tariffs, this gives us more flexibility and it's a more meaningful threat,' he said, adding that Trump's pressure strategy will not work if he does not resolve trade disputes with USA allies such as the European Union, Mexico and Canada.

Washington is preparing to also impose tariffs on an extra $16 billion of goods in coming weeks, and Trump has warned he may ultimately put them on over half a trillion dollars of goods - roughly the total amount of US imports from China previous year.

The 25% tariffs would apply to the same products proposed in July. Beijing immediately responded with its own tariffs on equal amount of U.S. goods.

According to the Petersen Institute of International Economics, more than 90% of the products on the United States tariffs list are made up of intermediate inputs or capital equipment.

Trump initially proposed 10 per cent tariffs on an additional $200 billion of Chinese imports, but he told trade officials this week to consider raising that to 25 per cent.

Chinese Foreign Ministry Spokesperson Geng Shuang said on Thursday that China will advise the U.S. to change its attitude, stop making false accusations, and return to the land of reason.

US manufacturers have reported a broad-based upturn in business activity in recent months, while consumer confidence is close to multi-decade highs.

But Trump's tariffs have drawn criticism at home in the United States for driving up costs for consumers and companies that rely on Chinese imports.

The Trump administration ratcheted up pressure for trade concessions from Beijing this week by proposing a higher 25 per cent tariff on $200 billion worth of Chinese imports.

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