U.S. threatens raising tariffs to 25% on $200bn of Chinese goods


The United States has already imposed 25 percent tariffs on $34 billion in Chinese imports and is readying 25 percent tariffs on another $16 billion worth to punish China for allegedly using predatory tactics to obtain US technology.

A bit of quick maths reveals that works out to US$50 billion (AU$67 billion) in fees.

"The increase in the possible rate of the additional duty is meant to provide the Administration with additional options to encourage China to change its harmful policies and behavior", Lighthizer wrote.

Washington and Beijing have not had any formal talks on China making changes to its intellectual property protection, technology transfers and subsidies for high technology industries.

Washington wants China to open its market more to U.S. products and stop harming American workers, one official said, speaking on condition of anonymity.

The US already imposed 25 percent tariffs on $34 billion in Chinese goods, with another $16 billion to be targeted in coming weeks. He gave no details of possible retaliatory measures.

US President Donald Trump has reportedly rejected a plan to levy tariffs of 10 per cent on an additional $200 billion of imports from China and ordered aides to prepare a proposal for tariffs at the higher rate of 25 per cent. So far, a total of $300 billion worth of imports to the USA and $100 billion in US exports are slated for higher tariffs, according to Moody's Analytics.

Mr Trump's pressure strategy would not work if he did not resolve trade disputes with U.S. allies such as the European Union, Mexico and Canada, he said.

But while the tariffs are aimed at hurting China, industry groups say they are having an impact on United States consumers and businesses, particularly manufacturers and farmers.

"I sense that we're seeing a hardening of attitudes on both sides", said Jacob Parker, vice president of China relations at the U.S. China Business Council.

In light of the possible increase of the additional duty rate to 25 percent, the close of the written comment period is extended from August 30 to September 5, and the due date for requests to appear at the public hearing is extended to August 13.

Lighthizer said China's decision caused "further harm to USA workers, farmers and businesses".

In response to earlier reports that the U.S. was considering the move, Chinese foreign ministry spokesman Geng Shuang warned Wednesday that "blackmail and pressure from the U.S. side will never work on China".

Geng said at a news conference, "we advise the United States to be level-headed and avoid simply acting on impulse".

The threats and counterthreats have stirred increasing unease from USA business and farm groups, which argue that they are the ones losing money and business based on all the new restrictions.

His statement comes after separate reports said the two sides were looking to restart talks to avert a trade war between the world's top two economies that could hammer global growth. Beijing responded by imposing the same penalties on the same amount of US imports.

In those circumstances it, too, might find itself confronting a USA president who sees trade as a zero sum game and is more concerned about the simple quantum of economic growth than its quality or sustainability.

The move signals displeasure among Trump's own party over his protectionist actions, but chances of it becoming law are slim as Congress would likely need to override a presidential veto by Trump.