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story.lead_photo.caption A trader watches stocks drop sharply Monday at the New York Stock Exchange as investors sought shelter from the escalating trade war between the U.S. and China. The Dow Jones industrial average fell more than 600 points on the day.

The U.S. on Monday prepared to hit China with new tariffs, further escalating the countries' trade war hours after Beijing announced plans to raise levies on $60 billion worth of U.S. goods.

The U.S. trade representative's office Monday released a list of about $300 billion worth of Chinese goods upon which the administration intends to levy tariffs of up to 25%. The trade representative's office invited comments on the plan and said it will hold a public hearing June 17. The list includes consumer staples such as mobile phones and toys.

Earlier in the day, President Donald Trump said he'll meet with Chinese counterpart Xi Jinping at a meeting of Group of 20 leaders scheduled for June 28-29 in Osaka, Japan. But Trump warned China not to go too far in responding to U.S. trade actions.

"There can be some retaliation, but it can't be very substantial," Trump told reporters Monday at the White House during a meeting with Hungarian Prime Minister Viktor Orban.

U.S. stocks dropped on signs of an escalating trade war, with the S&P 500 posting its biggest single-day loss in four months.

China said it plans to raise duties on 5,200 American imports starting June 1, defying a previous call from Trump to resist escalating the trade war.

The Finance Ministry in Beijing unveiled the measures on its website less than two hours after Trump tweeted a warning that "China should not retaliate -- will only get worse!" The new rate of 25% will apply to 2,493 U.S. products, with other goods subject to duties ranging from 5% to 20%, China said.

China's move to raise tariffs came in response to the U.S.' decision last week to increase levies on $200 billion in Chinese imports to 25% from 10%. Trump on Monday accused China of backing out of a deal that was taking shape, saying Beijing reneged on an agreement to enshrine a variety of changes in Chinese law.

"I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries," Trump wrote on Twitter. "You had a great deal, almost completed, & you backed out!"

"Ultimately, this is a political decision for the president and not an economic decision," said Ely Ratner, executive vice president of the Center for New American Security. "Does the political benefit of standing up to China change as the tariffs bite the economy? That's the fundamental question."

China's retaliation matches Trump's move last week in that it simply raises the duties on a list of thousands of items that had already been targeted in an earlier phase of the trade war.

Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don't kick in for 2½ weeks.

Both countries have indicated more talks are likely. Top White House economic adviser Larry Kudlow said on Sunday that China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin to Beijing. But nothing has been scheduled.

Mnuchin said on CNBC that the two sides remained in "ongoing" negotiations.

"I love the position we're in," Trump told reporters.

TARIFFS' EFFECTS

China's retaliation on about $60 billion in U.S. goods includes tariffs of as much as 25% on goods including computers, small aircraft, textiles, chemicals, meat, wheat, wine, liquefied natural gas, batteries, precision machinery and spinach. Some auto parts remain exempted from retaliatory levies.

Imports of American cars aren't affected, as a duty of 25% from a separate list of tariffs was suspended during the negotiations as a sign of goodwill.

As the trade dispute escalates, "there will be price hikes at Target, Costco, Home Depot and Walmart," said Nelson Dong, a partner with Dorsey and Whitney in Seattle. "The importers are going to pass on some or all of the tariff to the consumer, and that will become much more readily apparent and harder to mask."

Farm commodities such as pork and cotton slumped Monday, with soybeans falling 0.8% to $8.04 a bushel. They were trading around $9 a bushel last month and are now at their lowest price since December 2008. Agribusiness stocks, including Archer-Daniels-Midland Co. and Bunge Ltd., also retreated.

In a statement, American Soybean Association President Davie Stevens, a farmer from Clinton, Ky., expressed frustration that "the U.S. has been at the table with China 11 times now and still has not closed the deal. What that means for soybean growers is that we're losing. Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities."

Sen. Charles Grassley, R-Iowa, said it is time for U.S. allies to "get in the game" to push China to the negotiating table. "China needs to get with it," he said. "You can't move these goalposts like they're moving them and expect to be respected."

Many industries have cheered the president for confronting China over its pilfering of trade secrets and its market-distorting policies. But executives have grown increasingly restive as the tariff toll has mounted.

"This is a self-inflicted wound that will be catastrophic for the nation's economy," said Rick Helfenbein, president and CEO of the American Apparel and Footwear Association. "By tightening the noose and pulling more consumer items into the trade war, the president has shown that he is not concerned with raising taxes on American families, or threatening millions of American jobs that are dependent on global value chains."

China is running out of U.S. imports to penalize because of the lopsided trade balance between the world's two largest economies. Chinese regulators have instead targeted American companies in China by slowing down the clearing of shipments through customs as well as the processing of business licenses.

Oxford Economics calculated that higher tariffs will reduce the U.S. economy by 0.3% in 2020, a loss of $490 per American household.

Similarly, forecasters have warned that the U.S. tariff increases could set back a Chinese recovery that had appeared to be gaining traction.

Information for this article was contributed by Margaret Talev, Shawn Donnan, Miao Han, Mark Niquette, Jenny Leonard, Huang Zhe, Reade Pickert, Tara Patel and Saleha Mohsin of Bloomberg News; by Joe McDonald, Paul Wiseman, Damian J. Troise and Alex Veiga of The Associated Press; and by David J. Lynch, Taylor Telford, Damian Paletta and Gerry Shih of The Washington Post.

A Section on 05/14/2019

Print Headline: U.S. prepares new-tariff list

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Archived Comments

  • RBear
    May 14, 2019 at 6:18 a.m.

    We already know our president isn't that bright and had help from his daddy to get through college, but apparently he slept through US history and didn't learn about the Smoot-Hawley Tariff Act. Tariffs don't work and China is much better positioned to fight the US using these tactics.
    ...
    Make no mistake. I want better trade agreements with China, but we need to use better tactics than a trade war fueled by tariffs that US citizens end up paying to our own federal government. In other words, Trump just enacted a tax on the American public. Why is that acceptable? My bet with SJ is looking better all the time.

  • mozarky2
    May 14, 2019 at 9:42 a.m.

    I knew you were issue illiterate, RB, but that post was the worst I've ever seen from you, and that's saying something.
    President Trump has been laying the groundwork for a couple years now to have other Asian countries supply the goods we now get from China.
    Our farmers have other places to go with their crops, along with our manufacturers of other goods. That list of crap China just slapped tariffs on? There's very little on that list of that stuff we even produce anymore!
    China better positioned?!?!? You're nuts, RB! Our economy is soaring, China's is declining. We buy more from them than every other country combined! This will put a stake in the heart of China!
    Go do some learnin', RB!

  • Seitan
    May 14, 2019 at 11:05 a.m.

    Mozarky. Ford is going under, and it has a lot to do with the tariffs. Same goes for all those farmers going bankrupt. Other places to go? It's not that easy, especially when Trump shuts off obvious markets like Cuba. So much winning.

  • JakeTidmore
    May 14, 2019 at 11:26 a.m.

    What about all the US treasury bond China holds?
    ht tps://w ww.cbsnews.c om/news/us-china-tariff-what-would-happen-is-china-dumps-u-s-treasuries/
    What about stagnant wages in the US?
    Soaring? That't not what reports say - they basically say it's steady but there might be a decline in the future since most of Trump's gains are based on monies borrowed from other agencies or upon less than reliable predictions of future income. There are pluses and minuses to the Trump economy but one would be less than honest to call it soaring (maybe in your imagination).
    --
    Millions of monkeys typing on millions of typewriters tends to be the standard for blog-level discussion. No Shakespeare, Alan Greenspan, Socrates, or Machiavelli from this microcosm of news analysis. Just cage rattling, echoes of screeching and howls, and lots of sh*t being thrown at passersby.

  • GeneralMac
    May 14, 2019 at 11:51 a.m.

    JAKETIDMORE is one of the "millions of cage rattlers" also.

    He, like RBear, consider themselves one of the " Shakespeare, Allan Greenspan, Socrates, Machiavilli" but that is just their inflated ego speaking .

  • Seitan
    May 14, 2019 at 11:58 a.m.

    Jake. Notice GM could not refute your facts or logic.

  • mozarky2
    May 14, 2019 at 12:08 p.m.

    Don't know where you sourced your wage info, but you're way off base.
    I could show you my sources, but I don't for one second want to see yours, as you obviously pulled them out of your a**!
    Seitan, Ford is going under? Not what I'm hearing. But their F150 is the best-selling vehicle in the U.S. Maybe it's because the company is run by incompetent progs like you.

  • mozarky2
    May 14, 2019 at 12:21 p.m.

    Best economy of my 71 year lifetime, Jake. Anybody that wants a job can get one.
    Well, with the exception of shiftless progs and the Free S*** Army...
    Wages and productivity rising, better trade deals on the way, consumer and business confidence at near record levels...
    Look, I know you progs want the economy to crash, but it ain't happening.

  • hah406
    May 14, 2019 at 12:30 p.m.

    Moz, even though wages are rising, the last I read from WSJ was that they were still lagging in keeping up with the cost of living. And the farmers do not have other places to go with certain crops. China used to buy 60% of our soybean production. Just this morning, they interviewed a guy at the farm bureau who said soybean prices are $2.00 per bushel less than costs for Arkansas farmers. If farmers could sell elsewhere, Trump wouldn't be proposing another multi-billion dollar bailout for them.

  • GeneralMac
    May 14, 2019 at 12:47 p.m.

    GRAIN PRICES are globally set.

    It takes awhile for things to "shake out" but grain prices are like water in a lake .

    Water seeks its own level.

    The countries that will be selling soybeans to China won't have soybeans to sell to their previous customers.

    Besides, with China losing 1/3 of their hogs, they won't be buying nearly as much soybeans as in previous years.

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