Trump urges extra tariff hit for China

UNITED STATES: President Donald Trump has instructed the US trade representative to consider slapping an additional US$100 billion (NZ$138b) in tariffs on Chinese goods, the White House announced yesterday, in a dramatic escalation of the trade dispute between the two countries.

The news came a day after Beijing announced plans to tax US$50b worth of American products, including soybeans and small aircraft, in response to a US move earlier this week to slap tariffs on US$50b worth of Chinese imports.

The White House said Trump had instructed the Office of the US Trade Representative to consider whether US$100b of additional tariffs would be appropriate and, if so, to identify which products they should apply to.

He has also instructed his secretary of agriculture ‘‘to implement a plan to protect our farmers and agricultural interests’’.

‘‘China’s illicit trade practices – ignored for years by Washington – have destroyed thousands of American factories and millions of American jobs,’’ Trump said in a statement.

The latest escalation comes after the US on Wednesday said it would impose 25 per cent duties on US$50b worth of imports from China, and China quickly retaliated by listing US$50b worth of products it could hit with its own 25 per cent tariffs.

The Chinese list included soybeans, the biggest US export to China, and aircraft up to 45 tonnes in weight. Also on the list were American beef, whisky, passenger vehicles and industrial chemicals.

Earlier in the week, Beijing announced separate import duties on US$3b worth of US goods in response to the Trump administration’s duties on all steel and aluminium imports, including from China.

US officials have sought to downplay the threat of a broader trade dispute, saying a negotiated outcome is still possible. But economists warn that the tit-for-tat moves bear the hallmarks of a classic trade rift that could escalate. Already, tensions between the world’s two biggest economies have rattled global stock markets.

US Trade Representative Robert Lighthizer called China’s moved ‘‘unjustified’’ and said Trump’s proposal was an ‘‘appropriate response to China’s recent threat of new tariffs’’.

‘‘Such measures would undoubtedly cause further harm to American workers, farmers and businesses,’’ Lighthizer said in a statement.

‘‘Under these circumstances, the president is right to ask for additional appropriate action to obtain the elimination of the unfair acts, policies and practices identified in USTR’s report.’’

The clash reflects the tension between Trump’s promises to narrow a US trade deficit with China, which stood at US$375.2b worth of goods last year, and China’s ruling Communist Party’s development ambitions. Trump has said China’s trade practices have caused American factories to close and led to the loss of American jobs.

Trump’s top economic adviser, Lawrence Kudlow, said earlier yesterday in an interview with Fox Business Network that negotiations were ongoing. But he added: ‘‘At the end of the day, China’s unfair and illegal trading actions are damaging to economic growth, for the US, for China and for the rest of the world.’’ – AP