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WASHINGTON — President Donald Trump has directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports as the two nations move closer to a trade war.

In response, China has threatened what it called "comprehensive measures," raising the risk that it would target major American companies operating in China.

Trump's proposed new tariffs would amount to the latest round of punitive steps in an escalating rift between the world's two largest economies. The two nations are edging toward a trade fight that analysts say would undermine both their economies and likely slow global growth.

The White House has accused China of forcing U.S. companies to share advanced technology with Chinese partners as a condition of doing business there. The administration also revived its complaints Tuesday about America's gaping trade deficit with China, which it says reflects an unfair trading relationship.

Trump previously ordered 25 percent tariffs on $50 billion in Chinese goods in retaliation for Beijing's forced transfer of U.S. technology and for intellectual property theft. Those tariffs were matched by China's threat to penalize on U.S. exports, a move that drew the president's ire.

On Monday night, Trump told the U.S. trade representative, Robert Lighthizer, to target an additional $200 billion in Chinese goods for 10 percent tariffs. These penalties would go into effect, the president said, "if China refuses to change its practices" and proceeds with its plans for retaliatory tariffs.

The tit-for-tat tariffs could then escalate further yet: Trump threatened tariffs on $200 billion more in Chinese products if Beijing lashes back again.

Combined, the potential tariffs on Beijing could reach $450 billion — an amount equal to 89 percent of Chinese goods imported to the United States last year.

Neither side has yet imposed tariffs on the other in their growing dispute over technology and the U.S. trade gap; the first round is to take effect July 6. But he president asserted in a statement Monday night that China is determined "to keep the United States at a permanent and unfair disadvantage."

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," Trump said in the statement. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."

World financial markets buckled Tuseday. With concerns growing on Wall Street, the Dow Jones industrial average closed down nearly 300 points — more than 1 percent — on its sixth straight losing day. Stocks tumbled nearly 3 percent in Hong Kong, 2 percent in Tokyo and 4 percent in Shanghai.

China's Commerce Ministry assailed Trump's latest threat, saying it was an "act of extreme pressure and blackmail that deviates from the consensus reached by both parties."

"If the U.S. becomes irrational and issues this list, China will have no choice but to adopt strong countermeasures of the same amount and quality," the statement said.

China might be unable to match the U.S. tariffs because it imports much less from the United States — $130 billion in goods last year, compared with Chinese exports to the United States of $505.5 billion. That would leave less than $100 billion in U.S. goods to subject to a tariff hike, far short of the $200 billion Trump is threatening.

But Beijing's mention of "comprehensive measures" suggests that it would go beyond tariffs, said Jake Parker of the U.S.-China Business Council. Parker suggested that such steps might include delaying or denying licenses required by U.S. companies in China.

The moves could start to meaningfully slow U.S. growth, economists warn. Oxford Economics estimates that if Trump imposed the $200 billion in duties and China responded in kind, U.S. growth could slow by 0.3 percentage point next year.

Tariffs are already raising costs for some goods. A punitive duty the Trump administration applied to lumber imports from Canada has raised the price of a new home by $9,000, according to the National Association of Home Builders.

The White House hasn't set a date for the imposition of any new tariffs beyond the initial list. The next step will be for the Office of the U.S. Trade Representative to identify the Chinese goods to be penalized and to conduct a legal review.

In the first round of penalties announced by both nations, to take effect July 6, the U.S. plans to impose tariffs of 25 percent on $34 billion of Chinese imports, such as construction machinery, aerospace and power generation equipment. The White House is finalizing a list of $16 billion in additional goods it will sanction later.

China is retaliating by raising import duties on $34 billion worth of American goods. They include electric cars, whiskey and soybeans — a politically and economically vital export of America's heartland, where Trump enjoys support. And Beijing says it would impose tariffs on $16 billion more if the United States does so, too.

The tariffs on Chinese imports are the latest in a spate of protectionist measures unveiled by Trump in recent months. They included tariffs on steel and aluminum imports and a combative stance on trade negotiations from North America to Asia.

The escalation in the dispute with China may also serve as a warning to other trading partners with which Trump has been feuding, including Canada and the European Union.

Wall Street has viewed the trade tensions with rising concern that they could strangle the economic growth achieved during Trump's watch. Gary Cohn, Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt — "historic ingredients for an economic slowdown."

The White House's hard-line trade adviser, Peter Navarro, told reporters Tuesday that "it's clear that China does have much more to lose" because it sells so much more to the United States than it buys.

Read Wednesday's Arkansas Democrat-Gazette for full details.


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Archived Comments

  • RBear
    June 19, 2018 at 11:24 a.m.

    While we may complain about some of the trade practices of China, we have enjoyed pretty unrestricted access to the Chinese economy up to this point. That could easily change overnight if China wishes to increase retaliation against the US. China could also start to shift trade relations to other growing economies such as Africa and possibly even North Korea. It's pretty evident Trump is flying by the seat of his pants and didn't think this through.

  • mrcharles
    June 19, 2018 at 1:09 p.m.

    Acting tough but stupid never gets you anywhere but trump is taking this style to the limit. Yet a lot of his supporters think it makes merica great to have him talk tough even though they know in their hearts [ hard to say minds] he is stupid is as stupid does.

    Read the daily newspaper arm of the RNC , the business section today and see about effect on home building- other days had similar arguments. You would think his supporters would put two and two together but when you are the type that adds 1+1+1=1, thoughtful thoughts do not occur.

    June 19, 2018 at 2:55 p.m.

    Thoughtful Thoughts and Trump in the same Sentence is Very Very Unusual. Or for that Matter Thinking of any kind is Very Unusual for our Fearless Leader, The Trumpet Man.

  • rubythecat96gmailcom
    June 19, 2018 at 2:59 p.m.

    I don't want any Chinese junk. my parents washer/dryer use to last at least 12 years same with t.v. until we started getting the cheaper made crap from China. China needs us more than we need them. and our current administration is fully aware of this fact.

  • TimberTopper
    June 19, 2018 at 3:20 p.m.

    Gage, check the labels on your possessions. Hell you may be the best customer China has.