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Trump hits back at China with more tariffs on $200 billion in Chinese goods

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A decision to levy an additional 10 percent tariff on $200 billion in Chinese goods, was announced by the Office of the US Trade Representative (USTR) Tuesday (July 10). The new duties are not set to take effect for at least 60 days, providing for a public comment period with hearings on the tariffs scheduled for August 20-23. A final decision on the duties would come after August 30.

The most recent tariffs come on top of $34 billion in tariffs, which went into effect Friday, with another $16 billion to follow. President Trump’s latest move targets consumer products including televisions, clothing, bedsheets and air conditioners – goods which had avoided the original rounds of duties.

“As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports," USTR Robert Lighthizer said in a release. He called the latest tariffs an "appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies."

Move meant to counter Chinese retaliation

The move is a direct response to Chinese retaliation, Lighthizer remarked. “Rather than address our legitimate concerns, China has begun to retaliate against U.S. products,” he said. “There is no justification for such action.”

Lighthizer indicated he was open to discussion with China to head off the trade escalation. “As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China’s unfair trade practices and to China opening its market to U.S. goods and services,” he said.

War of words escalates, no talks currently scheduled

No US-China talks to resolve the dispute are currently set. A senior White House official told the New York Times yesterday evening that while the administration is open to engagement with China over the tariffs, the US had been “extremely clear” about its concerns with Chinese trade practices. He called China “nonresponsive” to those concerns. Meanwhile, the Los Angeles Times quoted a senior administration official who briefed reporters on the condition of anonymity as saying, “We do intend to keep the pressure on [China].”

China's Ministry of Commerce slammed the US' latest move as a “totally unacceptable” escalation and it promised to respond with its own measures. “They go low, we go high,” said Chinese Assistant Minister of Commerce Li Chenggang – channeling a phrase popularized by former First Lady Michelle Obama during the 2016 US elections. “There is a proverb in the West, ‘like a bull in a China shop,’” he added. “The US approach undermines the process of globalization and undermines the trade order.”

The Ministry said the US was "hurting China, hurting the whole world, and hurting itself," and called the latest duties an "irrational act" that "goes against the will of the people." China said it is "shocked by what the United States did," but will "take necessary countermeasures" to "defend the core interests of the nation and the fundamental interests of the people."

Though China did not tip its hand related to exactly what retaliatory moves it might take, if previous actions are any indication, US ag commodities and food products could find themselves in the crosshairs. As with other nations that have hit back at recent US trade tariffs, China has seen US ag as a ripe target given the strong support for President Trump seen in much of the nation's heartland.

China vows to raise issue at WTO

Besides unilateral action, China added "we appeal to the international community to jointly defend free trade rules and the multilateral trade regime and fight trade bullying." It also plans to challenge the US tariffs by lodging "an additional complaint with the WTO over the unilateral acts of the United States."

Resistance to tariffs mounts among Republican lawmakers

Besides China, top US lawmakers also reacted with dismay to the escalation. "Although I have supported the administration’s targeted efforts to combat China’s technology transfer regime, tonight’s announcement appears reckless and is not a targeted approach,” Senate Finance Committee Chairman Orrin Hatch (R-Utah) said in a statement. A longtime critic of the administration's trade approach, his response comes as no surprise. Earlier this month when asked about recent tariffs he told Politico "I’d like to kill ’em."

Other Senators, including Pat Toomey (R-Pa.), Bob Corker (R-Tenn.) and Jeff Flake (R-Ariz.) have taken an aggressive, legislative approach to push back against the tariffs. They have been seeking to attach language to various other  pieces of legislation which would curb the authority currently given to the President under the Trade Act, namely Sections 301 and 232, to impose tariffs on his own.

Late Tuesday, Flake tweeted of his latest effort on that front, "FINALLY, Senate will push back on the President’s abuse of Section 232 to impose tariff," he said, adding, "We will vote Wednesday on a “Motion to Instruct,” a first step toward reasserting Congress’s constitutional role on tariffs."'

Though the action touted by Flake targets Section 232, not Section 301 which is being used to justify the most recent round of tariffs on China, it's indicative of the mood among some in Congress who want to rein in presidential authority on the tariffs matter more generally. While efforts on that front are likely to continue, to date they have failed to generate enough support to move forward either as standalone legislation or attached to other bills. It's not yet clear if the continued moves by the administration could embolden other lawmakers to sign on to those efforts.

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