China threatens tariffs on $60 billion of United States imports

China blames US for

China blames US for"largest-scale trade war as tariffs kick

Administration officials told reporters in a phone briefing later that President Donald Trump had directed trade officials to consider raising proposed tariff rates on US$200 billion worth of Chinese imports from 10% to 25%, multiple news outlets reported.

If higher tariff rate is implemented, it would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of United States tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

Meanwhile, Treasury Secretary Steven Mnuchin is reportedly privately discussing the possibility of reaching a trade agreement with China's Vice Premier Liu He.

Since China joined the World Trade Organization (WTO) in 2001, its current account has consistently maintained a surplus, however due to the recent trade conflict with the US that record of performance may be preparing to take a tumble.

On the sidelines of the gathering of Association of Southeast Asian Nations (Asean) foreign ministers, China's Foreign Minister Wang Yi met with his counterpart Federica Mogherini, the highest representative of the European Union for foreign affairs and security policy, to reaffirm their commitment to multilateralism and free trade.

"If the USA takes measures to further escalate the situation, we will surely take countermeasures to uphold our legitimate rights and interests", a Chinese foreign affairs ministry spokesman said Wednesday, according to Bloomberg, which first reported the proposed escalation.

"China always believes that consultation on the basis of mutual respect, equality and mutual benefit is an effective way to resolve trade differences", the commerce ministry said.

"The news that Washington was planning to increase tariffs on Chinese goods was already making traders nervous ahead of the Fed and has been a source of USDJPY weakness", says Joel Kruger, an FX strategit at LMAX Exchange.

Malaysia manufacturing showed broad stabilisation during July
The composite PMI, which covers both manufacturing and services activity, slipped to 53.6 in July, from June's 54.4. Respondents indicated that the rise in new business was in line with stronger client demand.

The US government is now discussing and taking comments on the implications of these tariffs from key industry figures who are campaigning for the tariffs to be dropped or removed altogether until the 17th of August.

Chinese officials responded early Wednesday to threats of higher tariffs by saying they would retaliate again. The yuan fell against a trade-weighted basket of currencies to a level that's near the lowest on record, suggesting policy makers are allowing further weakness.

"The Trump Administration continues to urge China to stop its unfair practices, open its market and engage in true market competition", said U.S. Trade Representative Robert Lighthizer in a statement. The two sides have not held high-level talks for a couple months now.

Mr. Wang, who is in Singapore for a Foreign Ministers' meeting, said the spat will not affect diplomatic cooperation with Washington on North Korea. "Nor did it make concerted efforts with China". Beijing retaliated with matching tariffs on the same amount of US exports to China. The implementation could be delayed for weeks as the administration works out the details of which products it will target.

It's not as if the president doesn't have advisors capable of explaining the dangers of too much foreign investment-economist and Trump Trade guru Peter Navarro wrote an op-ed in the Wall Street Journal a year ago warning that at our current rate "foreigners will eventually own so much of the USA that Americans will wind up working longer hours just to eat and to service the debt".

What's the story on tariffs on China?

Beijing warned the threats will only be counter-productive for ongoing trade negotiations. "Now, the United States coerces and pressures others unilaterally".

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