President Donald Trump escalated his trade war with China Tuesday, identifying an additional $200 billion in Chinese products that he intends to hit with import tariffs.
The U.S. imposed an initial round of 25% tariffs, applying to $34 billion in imports, as part of a $50 billion tariff plan. "This action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy".
"The Trump administration is gambling that by wielding such a big club, it will force China to back down", said Edward Alden, a senior fellow at the Council on Foreign Relations.
Beijing thus far has vowed to respond in kind to any USA trade action.
"We encourage companies to optimize the structure of imports, increase imports of soybean, agricultural products, as well as seafood and cars from other countries and regions", said the ministry, explaining that the measures are aimed at mitigating the effects of the trade war with the United States.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, responded to Lighthizer's announcement with dismay. Industry groups have also highlighted the duties' potential to derail US economic growth.
In addition, the United States is considering separate duties on a further US$16 billion in Chinese goods, after a public hearing later this month.
The International Monetary Fund has warned that a full-blown trade war could undermine the broadest global upswing in years. "We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy".
The new duties are "a reckless strategy that will boomerang back to harm US families and workers", said David French, the National Retail Federation's senior vice president for government relations.
But China only bought about $135 billion in USA goods previous year, meaning it will run out of American products to tax before it matches Trump's latest move.