Trump slaps tariffs on $200 bln in Chinese goods

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There have been periodic reports that the Trump administration was on the verge of resuming talks with Beijing.

The Trump administration will slap a 10 percent tariff on about $200 billion in Chinese goods next week and more than double the rate in 2019, deepening what's shaping up to be a prolonged trade war between the world's two biggest economies.

While officials said the impact on the USA economy has been minimal, firms across the country report lost businesses, layoffs and possible bankruptcies as input costs rise and exports fall.

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In a filing with the government, for instance, Giant Bicycles Inc. of Newbury Park, California, noting that 94 percent of imported bicycles came from China a year ago, complained that "there is no way our business can shift its supply chain to a new market" to avoid the tariffs and warned "a tariff increase of this magnitude will inevitably be paid for by the American consumer".

"The president's negotiating tactics do not work well with China's way of thinking", said Sung Won Sohn, chief economist at SS Economics in Los Angeles.

Hasn't the United States already imposed tariffs?

The U.S. Treasury had invited Chinese officials, including President Xi Jinping's top economic adviser, to attend talks in Washington this week.

But he also signalled that he was digging in for the long haul.

The tariffs will rise to 25 percent on January 1 of next year.

President Trump said in a statement that if China retaliated, it would impose tariffs on a further $US267 billion ($373 billion) of additional imports.

The Trump administration's proposal for $US200 billion worth of tariffs drew protest from technology companies earlier this year.

The timing for activating the additional tariffs was unclear.

That raises another long-term possibility.

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But China said it would turn down the offer if the United States went ahead with more tariffs, CNN said. Hawks in his administration have been open about their goal of forcing a repatriation of American companies' supply chains.

"Tariffs have put the U.S.in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country -and yet cost increases have thus far been nearly unnoticeable", Trump tweeted.

So tariffs may be here to stay.

The Twitter announcement on Aug 10 caused the Turkish lira to crash almost 20 percent, and prompted President Recep Tayyip Erdogan to claim Turkey was victim of a "political plot" and an "economic war". "But he kills all attempts to negotiate". Critics dismissed Beijing's commitments as vague, and Trump made a decision to proceed with the tariffs after all.

This addition brings tariffs to about half of all goods imported from China to the U.S. Tariffs increase the cost of goods to U.S. buyers, and lead to higher prices for the same items from domestic producers and imports from countries that have avoided tariffs.

US steel production is over half what it was in the early and mid 1970s.

They also say U.S. economic growth and inflation are likely to have peaked this year, which could help to further turn the tide of market sentiment against the Dollar over coming months.

And then there is the opposition within the president's Republican party.

In July, the administration published a list of thousands of products that would be subject to the latest round of trade penalties.

Such moves suggest Trump blinked in the face of domestic concern.

The lower tariff rate could soften the blow ahead of key USA congressional elections in November. China could decide to pull out of planned trade talks in Washington next week, if it feels Trump isn't showing sufficient goodwill.

In a pair of tweets, Trump continued to make the case that tariffs largely harm the countries that are taxed, saying the impact on the USA economy has been "almost unnoticeable".

They may have a point. Last week Mr. Trump told reporters such a move could come "very soon". But those efforts are going nowhere.

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