New US, China tariffs take effect to start the week

Beijing has promised to strike back on Monday with duties on US$60 billion in American goods, bringing the total to US$110 billion, almost everything China buys from the United States.

The Wall Street Journal reported China has canceled upcoming trade discussions with the United States and will not send vice-premier Liu He to Washington this week.

Defiant in the face of increasing fears about the impact to the USA economy, Mr Trump has threatened to go after 100 per cent of imports from China if the country refuses to change policies he says harm United States industry, particularly the theft of American technology.

In his push for what he calls a level playing field in dealing with China, President Trump slapped tariffs on $200 billion worth of imports and threatened more if Beijing retaliated. Beijing had previously warned it would target $60bn in U.S. goods if Trump made good on his threat to impose the new tariffs.

The four-page section in Sunday's Des Moines Register, which carried the label "paid for and prepared exclusively by China Daily, an official publication of the People's Republic of China", featured such articles as one outlining how the trade dispute is forcing Chinese importers to turn to South America instead of the U.S. for soybeans.

Several rounds of Sino-U.S. trade talks in recent months have yielded no major breakthroughs and attempts at arranging another meeting in coming weeks have fallen through.

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The US has "made a series of false accusations, and used increasing tariffs and other means of economic intimidation, to try to impose its own interests on China by way of extreme pressure", the State Council (cabinet) said in a white paper on trade and economic tensions with Washington.

Rob Carnell, ING's chief Asia economist, said in a note to clients that in the absence of any incentives Beijing would likely hold off on any further negotiations for now. The lower Chinese figure highlights Beijing's inability to match the United States dollar-for-dollar in a tariff war.

FOX Business' Edward Lawrence reports on the exemptions included in the latest round of tariffs.

Trump has warned any retaliatory measures from China would force the U.S. to "immediately pursue phase three", which is tariffs on $267bn of additional imports.

Some analysts say there is also a risk that China could allow its currency to weaken again to cushion the blow to its exporters.

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