The Office of the United States Trade Representatives (USTR) this week announced a list of $16 billion worth of imports from China that will be subject to a 25 percent additional tariff. Customs and Border Protection will begin to collect the additional duties on the Chinese imports on August 23.

As a result China said Wednesday it will impose tariffs on an additional $16 billion in U.S. auto and energy products in a sign that Beijing and Washington are digging in for what could be a long and bruising trade conflict. “If the United States takes further measures that escalate the situation, We will definitely fight back,” said Geng Shuang, a foreign minister spokesman.  “We are determined to safeguard our legitimate and lawfuly rights and interests.”

The Trump administration imposed duties on $34 billion of Chinese goods last month, which went into effect on July 6, which prompted an immediate retaliation from China.

The new round of tariffs completes the president’s threat to impose $50 billion of import tariffs on Chinese goods.   The new tariffs on 279 products will affect goods such as motorcycles, steam turbines,  electronic parts, plastics, chemicals, batteries, and railway cars.

“The Trump Administration continues to urge China to stop its unfair practices, open its markets, and engage in true market competition.  We have been very clear about the specific changes China should undertake.  Regrettably, instead of changing its harmful behavior, Chinas has illegally retaliated against U.S. workers, farmers, ranchers, and businesses,” the U.S. Trade Representative Robert Lighthizer said in a statement.

“The increase in the possible rate of the additional duty is intended to provide the administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens,” Lighthizer said.

While the tariffs would not be imposed until after a period of public comment ends on September 5, a senior administration official said that the president remains open to conversations, and that the administration is “in contact with our Chinese counterparts.”

Chinese officials responded on Wednesday to threats of higher tariffs by saying they would retaliate again.

A Trump senior administration official said that Washington is ready to engage in talks with Beijing, but that “Trump is willing to take tough action in a way previous administrations have not in order to further discussions.”

President Trump is facing pressure from some business groups. “The breadth of the trade war’s impact on American businesses is evidence of the way trade is woven deep into the fabric of our economy.  Almost 98 percent of exporting firms in the U.S. are small businesses, and they represent about one-third of all merchandise exports.  These companies rely on trade to stay competitive,”  said U.S. Chamber of Commerce president Thomas Donahue on Monday, ahead of the latest announcement.

 

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