China warns against blackmail as Donald Trump considers higher tariffs

A Buddhist monk votes at a polling station during a general election in Phnom Penh Cambodia July 2018

In Beijing, a foreign ministry spokesman, Geng Shuang, said Beijing was open to dialogue but gave no indication about the status of possible negotiations.

The Trump administration ratcheted up pressure for trade concessions from Beijing this week by proposing a higher 25 per cent tariff on $200 billion worth of Chinese imports. At a campaign rally in Florida Tuesday night, Mr. Trump said China's response targeting US farmers has been "not nice".

The United States may jack up the tariff rate on the next $200 billion in Chinese imports it plans to target as it pressures Beijing to reform its trade practices, USA officials said Wednesday. "It will only hurt themselves".

The drop in the PMI, a key indicator of manufacturing health in the world's second-largest economy, came as Trump's administration proposed a 25 percent tariff on another $200 billion in Chinese goods, up from an earlier 10 percent plan.

"And the best news, I think, is we are coming together with the European Union to make a deal with them, so we'll have a united front against China and, I think, most of our trade team would tell you, we're moving close on Mexico ... Regrettably, instead of changing its harmful behavior, China has illegally retaliated against United States workers, farmers, ranchers and businesses", Lighthizer said in a statement.

Trump has launched an aggressive trade agenda this year, threatening several countries with high tariffs if they don't purchase more US products or allow more USA investment in their countries.

Two Trump administration officials told reporters on a conference call that Trump remains open to communications with Beijing.

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A final decision has not been made, and a number of Trump's threats toward China have been designed more to bring Chinese President Xi Jinping to the negotiating table than to fundamentally change US economic policy, said the person, who insisted on anonymity to discuss White House deliberations.

Chinese officials said they were prepared to retaliate again with higher tariffs of their own. It said retaliatory duties of between 5 and 25 per cent will be imposed on 5,207 products "if the USA side persists in putting its tariff measures into effect".

Last month, the USA proposed 10 percent tariffs on another $200 billion in Chinese products - from parachutes to sardines - in response to China's retaliation.

The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.

While the tariffs would not be imposed until after a period of public comment, raising the proposed level to 25 per cent could escalate the trade dispute between the world's two biggest economies. "He's going to continue to put the pressure on China".

The US Senate last week passed legislation which if enacted would lower trade barriers on hundreds of Chinese imports.

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