China announces fresh import tariff cuts amid brewing trade war

China announces fresh import tariff cuts amid brewing trade war

Announcing the latest round of tariffs, the president warned that he would slap duties on the remaining $267 billion worth of products that China exports to the United States if Beijing tries to retaliate.

At a meeting with former U.S. Secretary of State Henry Kissinger on Tuesday in NY on the sidelines of a United Nations meeting, Chinese State Councillor Wang Yi said that the two countries would only lose if they confronted each other. That scenario is only hypothetical, they said, but the results were significant: a 2 percent loss in growth in the first year for the United States, and a 3 percent drop in global trade.

The move also shows that the Chinese government is digging in and expects the trade war with the U.S. to last for the foreseeable future.

Trump called for reforms in the world trade organization, noting that China continued to "rig the system" by stealing intellectual property, forcing companies to transfer technology, and dumping their state-sponsored products around the world. US administrations have been trying to do this for decades, often preferring a multilateral approach.

But Trump followed up his accusations with a series of tweets accusing China's government of paying for newspaper space in the U.S. state of Iowa to push its message.

USA representatives there included Blackstone Group LP (BX.N) co-founder and Chief Executive Stephen Schwarzman and Mastercard Inc (MA.N) Chief Executive Ajay Banga, the National Committee on United States-China Relations said on its website. Combined, the tariffs now cover almost half the goods and services China sells America and almost 60 percent of what the United States sells China.

Wang Yi, who is attending the United Nations General Assembly, met with a group of US business leaders in NY, hours after the USA moved to implement its latest round of tariffs.

Wang's comments to Kissinger came a day after a meeting with USA business leaders, during which the foreign minister warned the Trump administration's policies could lead to "total destruction" of economic ties with China.

"Given these developments, it is increasingly likely that both sides will not resume negotiations for some time, at least until there is a noticeable shift in the political mood on either side".

By contrast, China would gain by exporting more to third countries where USA goods are subject to tariffs, although that slight gain would be temporary and partly offset by a negative effect on confidence.

Trump earlier this month accused China of targeting rural voters who support his presidency by hitting agricultural goods.

Import tariffs vary by product. He was apparently referring to talks in May, when it appeared that the two sides had sorted out a framework before the White House backed away. "Yeah, I can't tell you now, but it came - it didn't come out of nowhere, that I can tell you", he told a press conference.

But he said the government is working to accommodate their needs and reduce their tax burdens.

Meanwhile, experts are trying to understand what economic impact the trade war might have. That dampened hopes for a settlement and prompted suggestions China might go so far as waiting for Trump to leave office instead of negotiating.

"Ford produces more cars and makes more profits in China through its JV than it does in the United States", he said.