China vows retaliation for $200 billion U.S. tariff threat


On Wednesday, Beijing accused Washington of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 per cent tariffs on $200 billion of Chinese goods.

The new list is a retaliatory measure following China's own retaliatory tariffs the country announced after the us unleashed its initial $34 billion in tariffs last week.

China imported USA goods worth $130 billion a year ago and Friday's tariff hike hit $34 billion of that, with another $16 billion cited for a possible increase.

More than 6,000 items could be affected - including burglar alarms, vehicle tyres, handbags, baseball gloves, carpets, toilet paper, dog food, and hundreds of food products.

The spiralling conflict stems from Washington's complaint that Beijing steals or pressures companies to hand over technology and concerns that plans for state-led development of Chinese champions in robotics and other fields might erode American industrial leadership. However, China has vowed to match every tariff tit-for-tat, and will likely follow through.

President Donald Trump has threatened to tax as much as $US550 billion in Chinese products - an amount that exceeds America's total imports from China past year.

"The behavior of the hurting China, hurting the world and hurting itself", China's commerce ministry spokesperson said in a statement, according to the BBC, before adding that Beijing will have to take "necessary countermeasures".

The administration will hold hearings on the proposed list late next month. Such a move could have a materially negative effect on U.S. stocks, Capital Economics says.

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The US government said it was readying new tariffs of 10% on $200 billion worth of Chinese goods, releasing a list including fruit and vegetables, handbags and baseball gloves. USA officials insist China's retaliatory tariffs are unjustified.

"Nobody wins in a global trade war".

"With the announcement from the U.S on the Chinese tariffs, the reaction on the policy side from China will be the key event to watch in the coming days", said Shinichiro Kadota, senior FX strategist for Barclays in Tokyo.

Analysts say the Chinese government could target trade in services between the two countries, such as tourism and education, or seek to make life hard for big American companies operating in China.

"The threat to the US economy is less about a question of "if" and more about "when" and 'how bad, '" David French, an executive at the National Retail Federation, told The New York Times. "At the same time, China will report the US' unilateral behaviour to the World Trade Organization", reports China News.

Stock markets in Asia fell sharply during early trading on Wednesday amid the escalating trade tension between the two economic giants.

"China has no option but to fight fire with fire. It will also result in retaliatory tariffs, further hurting American workers", a Chamber spokeswoman said.