European Exporters Shift Trade To Avoid Higher US Tariffs

Trump Announces New Taxes on TVs and Air Conditioners

A possible second round of tariff hikes announced Tuesday by the U.S. Trade Representative targets a $200 billion list of Chinese goods.

But U.S. Trade Representative Robert Lighthizer said the 10 percent duties, which also cover many consumer products that may also contain unlisted plastics components, are needed to put more pressure on China.

The list names more than 6,000 items including food products, minerals and consumer goods such as handbags.

The National Retail Federation, an industry group, warned about the impact on prices from the new measures.

Hours after the announcement was released, China's Ministry of Commerce issued its own statement, expressing a "solemn protest" against the United States.

President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of United States imports from China past year.

China's assistant commerce minister Li Chenggang said earlier on Wednesday that the latest proposed tariffs harms the World Trade Organisation (WTO) system and hurts globalisation.

The Office of the U.S. Trade Representative will accept public comments and hold hearings on the plan August 20-23 before reaching a decision after August 31, according to a senior administration official. They warned tariffs on imports raise consumer prices and expose USA farmers and manufacturers to retaliation. This has raised concerns that China could retaliate with non-tariff trade measures.

Trump has already said that if China retaliates, he'll look to levy tariffs on another $200 billion of Chinese exports.

Christine McDaniel, a senior research fellow at George Mason University in Virginia, told VOA that while the Trump administration's actions have bipartisan congressional support, its strategy to date of tariffs and investment restrictions could be costly to USA manufacturers and consumers.

In financial markets, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5 per cent, while the main indexes in Hong Kong and Shanghai fell more than two per cent.

"Unilateral actions that alienate long-standing USA allies and close off the US market to the rest of the world are not a recipe for economic growth and prosperity and are very unlikely to change China's unfair practices", ACC said. The index had gained for the past two sessions, having enjoyed a lull from the trade war fears that lashed global markets last week.

Whether the trade war continues will depend on the political reaction to the current tariffs, says Gary Hufbauer, senior nonresident fellow at the Peterson Institute.

"Xi can't be seen as soft on the US", said Bonnie Glaser, director of the China Power Project at CSIS in Washington.

The USTR, the federal agency that oversees worldwide trade policy and negotiations, said it is responding to Beijing's decision to retaliate instead of changing its policies.

"China has no option but to fight fire with fire".

On top of this, these tariffs are eliminating numerous economic gains created by last year's tax reform. But Trump hasn't backed down, arguing that China's unfair trading practices are hurting American workers.

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