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Trade tensions

US unveils new tariffs on Chinese imports worth $200bn

'Shocked' China pledges to take 'necessary countermeasures'

The U.S. has decided to impose new tariffs on Chinese goods. Above, President Donald Trump is seen with Chinese President Xi Jinping in September 2017.   © Reuters

NEW YORK -- The Trump administration on Tuesday unveiled a list of more than 6,000 Chinese imports worth $200 billion to be hit with 10% tariffs, preparing yet another salvo in a budding trade war.

In a statement released that afternoon, U.S. Trade Representative Robert Lighthizer said that instead of changing its practices, China had retaliated against the tariffs President Donald Trump had imposed on approximately $34 billion in Chinese goods last week.

China's Ministry of Commerce responded with a statement of its own on Wednesday, local time, hinting at further retaliation. "The Chinese side is shocked by the actions of the U.S.," the ministry said, adding that China "has to make the necessary countermeasures" without elaborating. The ministry did say China would swiftly file another complaint with the World Trade Organization.

"We call on the international community to work together to safeguard the rules of free trade and the multilateral trading system, and jointly oppose trade hegemonism," the ministry said.

The extensive U.S. list unveiled on Tuesday covers 6,031 product lines, including live carp, frozen pork, Pacific salmon, yellowfin tuna, crabmeat, lobsters, carrots, celery, television cameras, digital cameras, TV components, refrigerators and landline telephone parts. It does not include mobile phones.

The move will bring total Chinese imports subject to new tariffs to $250 billion, equal to around half of China's exports to the U.S. in 2017. China will "therefore suffer a significant deterioration in export competitiveness to the U.S. compared to other emerging markets' manufacturing exporters," said Rajiv Biswas, Asia Pacific Chief Economist at IHS Markit.

Biswas warned that Asian countries "are also vulnerable to collateral damage" due to East Asia's integrated supply chain.

Lighthizer said that for years, "China has pursued abusive trading practices with regard to intellectual property and innovation," with an eight-month probe from 2017 concluding that Beijing's industrial policy led to "the transfer and theft of intellectual property and technology to the detriment of our economy and the future of our workers and businesses."

The administration has repeatedly taken issue with President Xi Jinping's signature "Made in China 2025" initiative, which seeks to turn the country into a high-tech manufacturing powerhouse.

Washington "has patiently urged China to stop its unfair practices, open its market, and engage in true market competition," Lighthizer said. "We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior," and instead retaliated, he said.

The Trump administration's announcement hit Asia's financial markets. China's benchmark Shanghai Composite Index, Japan's Nikkei 225 and South Korea's KOSPI each fell more than 1% in early trading on Wednesday. Offshore, the yuan fell against the dollar.

On Thursday, one day before the initial U.S. tariffs kicked off, affecting $34 billion worth of Chinese goods, Trump announced that another round of tariffs on $16 billion worth of trade would likely take effect in two weeks. He also said he would consider imposing additional tariffs on $500 billion in Chinese goods.

First "34, and then you have another 16 in two weeks and then as you know we have 200 billion in abeyance and then ... we have 300 billion in abeyance. OK? So we have 50 plus 200 plus almost 300," Trump said.

The new list will be finalized after a roughly two-month comment period. Four days of public hearings will begin on Aug. 20.

The administration said the moves are being made under Section 301 of the Trade Act of 1974, which grants the power to take all appropriate action against actions by foreign governments that are unfair or violate international trade agreements.

Wataru Suzuki and Eri Sugiura in Tokyo contributed to this story.

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