China appeals for US calm after new tariff threat

China appeals for US calm after new tariff threat

China appeals for US calm after new tariff threat

US President Donald Trump has escalated his trade war with China, ordering his administration to consider more than doubling proposed tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent, as talks between Washington and Beijing remain at a standstill. "Importers may have ordered aggressively in June ahead of tariffs imposed this month by the USA and China", the port stated in a press release.

The Trump administration plans to propose slapping a 25-percent tariff on $200 billion of imported Chinese goods after initially setting them at 10 percent, in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday.

While the tariffs would not be imposed until after a period of public comment, raising the proposed level to 25 percent could escalate the trade dispute between the world's two biggest economies.

"We hope that those directly involved in the United States' trade policies can calm down, carefully listen to the voices of USA consumers.and hear the collective call of the worldwide community", Wang, a member of the country's state council, or cabinet, said in Singapore.

The latest signal that China's economy may be feeling some pain associated with Trump's tariffs on about $34 billion in Chinese goods was the softening of the Purchasing Managers' Index (PMI) in July.

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.

The US Dollar index was quoted 0.19% higher at 94.84 during early trading Thursday while the Pound-to-Dollar rate was 0.35% lower at 1.3078 and the Euro-to-Dollar rate was 0.28% lower at 1.1629.

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Other global markets felt the heat. The FTSE 100, an index with broad worldwide diversification, was down 0.56% at 7,610 in London while the German DAX was 1.31% lower at 12,569 in Frankfurt. It is also planning more spending on infrastructure to cushion the impact of trade tensions.

"Electronics-makers are preparing to shift more production to Southeast Asia as trade tensions with the United States make it less appealing to manufacture gadgets in China". Europe, Canada and Mexico are part of the tariff wars, too.

"As regards the threat by the United States to upgrade the trade war, China is fully prepared and will introduce counter-measures to defend the country's dignity and the interests of the Chinese people, and defend free trade and the multilateral system", China's commerce ministry said on 2 August.

"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. USA economic growth reached its fastest pace for four years during the second quarter, while growth in the Eurozone and elsewhere has remained tepid in the wake of a first quarter slowdown.

"Secondly, we would advise the USA side to return to reason, and not blindly let emotions affect their decisions, because in the end this will harm themselves", Geng said. The US will issue more than $US1 trillion of bonds this year, an amount also affected by the Fed's steady shrinkage of its balance sheet.

The caveat, with other comments, suggested Powell believed the Fed might be moving too aggressively to tighten USA monetary policy.

"With the USA threatening to increase tariffs to 25 per cent from 10 per cent and the Chinese vowing not to react to "blackmail" to get them back to the negotiating table, this could be the catalyst that tips sentiment and some markets into a tailspin to the downside, especially as we enter the lower liquidity holiday trading season". "As a result, we expect to see a reversal of the current level of USA dollar overvaluation heading into 2019", says Lee Hardman, a currency analyst at MUFG.

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