Imposition of 25 per cent import tariffs on Chinese goods worth $200 billion is being considered by the US. This is more than double the 10% that was planned initially.
President Donald Trump has made this request for a review of the higher tariff in an effort to make China change its trade practices.
But this decision carries the risk of the enhancement of the chances of a trade war between the two largest economies of the world.
While accusing of Washington of blackmailing, imposition of retaliatory tariffs would be done by China if the US went ahead with the imposition of tariffs plan.
“If the US side takes steps to further escalate the situation, we will definitely take countermeasures to resolutely safeguard our legitimate and legal rights and interests,” said foreign ministry spokesperson Geng Shuang.
According to the White House, the threatened tariffs are being taken as a response to the unfair trade policies of China which has been blamed by Trump for US’s huge trade deficit with China.
The US had first imposed 25 per cent import tariffs on Chinese goods worth $34 billion on 6 July. Retaliatory tariffs were imposed on US goods by China.
The US had announced import tariffs on a second round of Chinese goods worth $50 billion in March and tariffs on another $16bn worth of Chinese goods – a part of the announced second round of tariffs, is pending.
It was very recently that Trump had threatened that he was not averse to imposing tariffs on the entire $500 billion wor4th of Chinese goods imported into the US.
The US administration further published a list of $200bn that it wants to impose tariffs on of 10 per cent which is now being reviewed to be increased to 25 per cent.
“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 behaviour and adopt policies that will lead to fairer markets and prosperity for all of our citizens”, said US Trade Representative Robert Lighthizer.
Chemicals, textiles, minerals and consumer goods ranging from baseball gloves to frozen fish fillets from China imported into the US are included in the US list of more than 6,000 items worth $200bn in annual trade hat are to be levied.
The White House move has been supported by some US politicians.
Senator Marco Rubio, a Republican from Florida, tweeted “the only way to remove barriers is to demonstrate to [China] our willingness to retaliate with barriers”.
The idea however has been condemned by other groups that have said that costs for US households and businesses would ultimately get increased.
“China’s trade abuses need to be addressed, but tariffs are not the answer,” the National Retail Federation said.
(Adapted from BBC.com)