China set to respond to new round of U.S. tariffs

China set to respond to new round of U.S. tariffs

China's exports surged more than expected in July despite US duties and its closely watched surplus with the United States remained near record highs, as the world's two major economic powers ramp up a bitter dispute that some fear could derail global growth.

China has announced plans to put tariffs of 25% on United States products worth $16 billion, the latest move in an escalating trade war.

The U.S. government says the tariffs will give it leverage to challenge Beijing's trade policies, adding that it will soon release details on how companies can apply for exclusions.

They appear far from a resolution. and according to USA local news outlets, the USTR is reviewing the 10 percent tariffs on a further 200-billion US dollars of Chinese imports...and is considering raising the rate to 25 percent.

Imports also rose much faster in July thanks to still solid domestic demand, official data showed on Wednesday, with purchases of commodities like copper and iron ore rising from June.

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Some U.S. industries have expressed disappointment at Tuesday's decision.

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

The growth rate was the strongest in almost four years, and Trump said it was further proof his economic policies were working.

"Currency devaluation, which may have helped exports to some extent, has been largely market-driven in our view and is not a preferred policy tool by Chinese policy makers as part of the retaliation measures", Wang said.

As the U.S. -China trade spat turns into a full-blown war with tariffs and retaliatory tariffs and threats of further tariffs, U.S. energy exports to China may suffer with Beijing now following through with its threat to slap tariffs on U.S. oil and oil product imports.

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Analysts still expect a less favorable overall trade balance for China in coming months given it's early days in the tariff brawl. While there's no major risk of the world lapsing into "damaging stagflation", the possibility remains of a "bigger blow-up" that sharply reduces trade, as in the 1930s, it said.

The Chinese counter-move will take effect immediately after the United States imposes tariffs on the same amount of Chinese goods on 23 August. And as trade wars heat up, more and more exporters are waiting and watching what will happen next.

"My expectation is that U.S. tariffs on $250 billion of imports from China will be in effect about a month prior to the November U.S. elections".

China's levies will come into force at 12:01 on August 23, according to a statement on the finance ministry's web site.

The U.S. economy grew at an annual rate of 4.1 percent in the second quarter of 2018, which pundits believe is likely to slow down in the second half of the year, as fiscal stimulus fades and the Federal Reserve further increases interest rates.

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In the meantime, it sought public comment on the new items.

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