Trump raises stakes with new round of China tariffs

Last month, it unveiled a proposed list of tariffs on $60 billion of USA goods ranging from liquefied natural gas to certain types of aircraft - should Washington activate the tariffs on its $200 billion list.

Collection of tariffs on the long-anticipated list will start on September 24, but the rate will increase to 25 per cent by the end of this year.

Beijing has said it will swiftly retaliate against American exporters - a move that stands to hurt United States farmers and other companies that sell their products to China.

The US Treasury had invited Chinese officials for more talks to try to resolve trade differences last week but the prospect of negotiation seems bleak now.

China's Ministry of Commerce has promised to respond to Trump's latest attack with tariffs on $60 billion worth of United States goods. "It is hard to see what the administration's vision of an endgame might be other than total capitulation by China to all USA demands".

China is reviewing plans to send a delegation to Washington for fresh talks in light of the USA decision, the South China Morning Post reported on Tuesday, citing a government source in Beijing, raising the risk of a prolonged trade battle between the world's largest economies that could hit global growth. But tariffs are also used as a trade weapon, in which a country heavy on imports, like the USA, attempts to use the surcharge to force policy changes that diplomacy has failed to reach. Wall Street closed the day solidly in the red, and word of the fresh round of tariffs had already sent Chinese stocks tumbling more than one percent, with the benchmark Shanghai Composite Index falling to 2,651.79, the lowest level since 2014. This was the basis of the series of measures set in place in the immediate aftermath of the war: the Bretton Woods monetary system which tied major currencies to the dollar in fixed exchange rates, the General Agreement on Tariffs and Trade that sought to bring down tariff barriers and the establishment of the International Monetary Fund and the World Bank to ensure international economic collaboration.

He said China had to agree to some of the White House's demands for any progress to be made. Executives complained the tariffs would make their products more expensive, costing them sales.

"Most of our member companies are "in China, for China" - selling goods to Chinese companies and consumers, not to Americans - and thus ultimately boosting the USA economy", Jarrett said.

Initial reaction from the business community Monday was unfavourable. He campaigned on a promise to tax imports and rewrite or tear up trade agreements that he said put USA companies and workers at a disadvantage. "Setting aside whether this would be a successful negotiating tactic by the president, which only time will tell, the rapid escalation of tariffs and increasing uncertainty will cause significant short-term harm to both businesses and consumers". Economists at Bank of America Merrill Lynch have warned that a full-fledged trade war, especially one that lasts more than a year, would slow the USA economy. China will reportedly decline further talks if Trump goes through with the tariffs on Monday.

In fact, tariffs are taxes that are paid by Americans who import goods from overseas. The administration is targeting a bewildering variety of products - from sockeye salmon to baseball gloves to bamboo mats - forcing US companies to scramble for suppliers outside China, absorb the import taxes or pass along the cost to their customers.

Smart watches and devices that use bluetooth wireless communications, the technology behind Apple's AirPods and other products that work with smartphones, will be excluded from the new tariff list.

The US chamber of commerce, retailers, agricultural groups and some members of Trump's own Republican party have spoken out against his tariff campaign.

"We are open to talk if there are serious talks", Larry Kudlow, director of the National Economic Council, said Monday.