White House economic adviser Larry Kudlow announced during an interview on Monday that President Donald Trump would likely be imposing new tariffs on a "couple hundred billion" worth of imports from China.
In announcing the latest levies on Monday, Trump hinted at that argument again, pointing to his "great respect and affection" for Xi Jinping, his Chinese counterpart, and raising the possibility of a negotiation. Markets traded nervously, with the yuan lower against the dollar, Chinese shares mixed and S&P futures weaker.
If China reacts once again to the United States imposing tariffs on it, the U.S. will find an additional $200 billion worth of goods to throw tariffs on.
"Collection of tariffs on the long-anticipated list will start September 24 but the rate will increase to 25 percent by the end of 2018, allowing United States companies some time to adjust their supply chains to alternate countries, a senior administration official said".
USTR has removed about 300 product categories from tariff list and has cut some subsets of products, but total value still "approximately $200 billion".
Its the latest move by the administration to punish china for not complying with fair trade practices.
Other officials who advise the country's leaders are suggesting China impose limits on the sale of parts and supplies needed by US businesses, using "export restraints" to threaten their supply chains. "But, so far, China has been unwilling to change its practices". Consumer safety products made in China, such as bicycle helmets sold by Vista Outdoor and baby auto seats and playpens from Graco Inc also were taken off the list.
The new round of tariffs on good ranging from electronics, seafood and housewares, according to the White House statement. China has said it will hit back.
The prospect of a more aggressive trade war with China pushed stocks lower, after investors had previously been largely untroubled by the Trump administration's trade policies.
But there is little prospect of such an outcome because, while the USA is demanding that the trade deficit with China be reduced, the conflict does not merely centre on that issue.
And as the China tariffs are imposed, top officials of the European Union are meeting to discuss how they might overcome the financial sanctions the U.S. will impose against European companies if they maintain economic ties with Iran after November 4 following the unilateral abrogation of the Iran nuclear deal.
"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower United States growth and competitiveness and higher prices for U.S. consumers", Apple said in a letter. "They want to make a deal".
The decision throws into doubt efforts to reach a diplomatic breakthrough in the conflict.
Still, American consumers could start feeling the cost of the tariffs for everyday goods, as the latest move brings all Chinese imports subject to a new tariff to $250 billion, roughly half of China's shipments to the USA past year.
The administration earlier this month floated the idea of talks led by Mnuchin, with Liu expected to lead the Beijing delegation.
"My administration will not remain idle while those interests are under attack".
China is one of Apple's largest markets, and the tech giant said increasing tariffs on Chinese goods could harm its business.
China is expected to further retaliate against the United States, and top officials have warned that could include penalizing USA companies that rely on Chinese components for phones, cars, televisions, and other products.
Additional tariffs on $267 billion of imports from China would push the cumulative total beyond the amount of goods the US bought from the Asian nation a year ago. China has made offers to increase its imports from the United States, all of which have been rejected.
Trump "has not been satisfied with the talks with China on this", Kudlow said.
The administration revised the list of goods that will be hit by tariffs following a commentary period and public hearings last month.