China says tariff threat against US 'justified'

US-China trade war may raise gadget prices

The new China tariffs on the US will impact metals, chemicals, and agriculture-related items.

White House economic adviser Larry Kudlow gives a press briefing about upcoming G7 in the White House in Washington, U.S., June 6, 2018.

"The U.S. side has repeatedly escalated the situation despite the interests of both enterprises and consumers", said China's Ministry of Commerce in a Web posting.

US President Donald Trump has said he is determined to reduce the large US trade deficit with China.

The tariffs follow talks this spring that failed to produce an agreement.

The US and China implemented tariffs on $34 billion worth of each others' goods in July. China retaliated in kind.

These new tariffs would affect about 38% of all American exports to China, which are worth about $170 billion in total.

United States threats have escalated since, with the president saying he is ready to impose tariffs on all $500bn of Chinese imports.

Washington suggested the rate on the proposed extra tariffs could be increased from 10 to 25 per cent.

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Products in line for tariffs include meat, coffee, nuts, alcoholic drinks, minerals, chemicals, leather products, wood products, machinery, furniture and auto parts.

Concerns about the trade war have already affected China's currency, which has fallen nearly 9% against the dollar since April.

"China's countermeasures are rational", the Global Times, a tabloid run by the official People's Daily, said in a commentary.

The tensions are also having an impact on trade flows.

With LNG demand expected to skyrocket over the next 12 to 18 months, there are still some two dozen firms seeking to build new LNG export terminals in the United States and tariffs may limit their ability to secure sufficient buyers to finance their proposed projects.

China accounted for about 16% of America's trade in goods previous year.

It is hard to predict how the confrontation will end, Kenneth Pomeranz, a professor of Chinese history at the University of Chicago, told the BBC.

The United States alleges that China steals USA corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America's expense.

"I can imagine [Chinese officials] just sort of hoping that if they do stand tough, either the United States will eventually just decide to settle for some symbolic victory that doesn't really matter or that there will be a shift in American politics", he said.

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