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Trump Escalates China Trade War With A New $200 Billion Tariff Threat, Beijing Calls it “Blackmail”

As promised, President Trump has directed the United States Trade Representative to consider more tariffs on Chinese imports in response to the country’s retaliation against Trump’s first set of tariff measures.

These tariffs, if they take shape, would come in addition to the $50 billion in tariffs the president confirmed on Friday, and would be above and beyond any already in place tariffs on China trade.

Because the tariffs are designed to “encourage” China to correct its unfair practices tied to intellectual property, Trump has been clear that any acts to hit back—which China did, promising tax measures of “equal scale and equal strength”—would be an additional affront.

“Unfortunately,” Trump said in a White House statement released Monday, “China has determined that it will raise tariffs on $50 billion worth of United States exports. China apparently has no intention of changing its unfair trade practices related to the acquisition of American intellectual property and technology.”

Instead of adjusting, which the president wanted, he said China is now threatening U.S. companies, workers and farmers who have done nothing wrong, and that its in-kind tariff response “clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable.”

As such, Trump has directed the USTR to identify an additional $200 billion worth of Chinese goods that could face tariffs at a 10 percent rate, lower than the 25 percent tariff the first $50 billion worth of targeted goods will face.

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“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said in the White House statement. “If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods.”

China’s actions, however, don’t at all resemble backing down.

A statement from the country’s ministry of commerce Tuesday said China will strike back again if need be, with both “quantitative” and “qualitative” measures.

“Such a practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community,” the statement said, according to Xinhau news.

In short, the standoff continues. And as many continue to reiterate, neither side will likely emerge the winner.

“By pushing for additional tariffs on $200 billion worth of U.S. imports from China, the president is increasing his ‘Trump Tax’ without asking for input from Congress and thus raising the cost for American consumers,” Rick Helfenbein, president and CEO of the American Apparel and Footwear Association, said Tuesday. “Rather than letting this continue, it is time for Congress to utilize its power to regulate commerce with foreign nations, as outlined in the Constitution.”

As the inquiry into additional tariffs is still so preliminary, there hasn’t been much indication as to what products would make the list of targets, but if the National Council of Textile Organization gets what it’s been pushing for, textiles and apparel might still make the cut.

In a statement Friday following Trump’s announcement that the U.S. was moving forward with the first $50 billion in tariffs on Chinese imports, NCTO praised the removal of most textile and machinery from the tariff list as their inclusion would have hindered the competitiveness of U.S. textile manufacturers. What NCTO wasn’t as pleased with, however, was that textiles and apparel were still left out of the conversation.

“NCTO is convinced that the Trump administration’s efforts to deter China’s unfair trade practices would be even more effective if textile and apparel end products from China were made subject to Section 301 tariffs,” NCTO president and CEO Auggie Tantillo said. The line of thinking is that curbing textile and apparel imports from China, would improve prospects for domestic manufacturing in the sector.

When Trump confirmed the now-in-place $50 billion in tariffs, which will take effect July 6, nearly 300 of the tariff lines for inclusion were still under review, meaning a portion of what’s proposed could potentially fall off the list and other things could be added. NCTO said Friday that it would be working closely with the Trump administration to “refine” the list in hopes of seeing more textile and apparel products added. That collaboration could also end up aimed at the new $200 billion tariff list, should the U.S. move forward with it.

The USTR said Monday that the additional $200 billion in tariffs now under consideration will undergo a similar process as the first $50 billion, but added no further details as to when a proposed list of targets could be forthcoming.