White House readies $400bn-worth of possible tariffs on Chinese made goods

President Donald Trump instructed his country's Trade Representative to identify another $200bn-worth of goods on which to levy 10% tariffs.

He also called for a separate list to be prepared detailing a further $200bn-worth of Chinese goods that could be targeted if Beijing responded with countermeasures of its own.

The moves overnight followed Beijing's decision, on 15 June, to retaliate for the duties on another $50bn-worth of Chinese goods which Washington had announced that same day.

China's Ministry of Commerce responded immediately, describing the move as "extreme pressure and blackmail."

"I have an excellent relationship with President Xi, and we will continue working together on many issues. But the United States will no longer be taken advantage of on trade by China and other countries in the world," the President said in a statement issued by the White House.

"We will continue using all available tools to create a better and fairer trading system for all Americans."

According to the White House, "These tariffs are being imposed to encourage China to change the unfair practices identified in the Section 301 action with respect to technology and innovation. They also serve as an initial step toward bringing balance to our trade relationship with China.

"However and unfortunately, China has determined that it will raise tariffs on USD50bn worth of US exports. China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening US companies, workers, and farmers who have done nothing wrong."

Separately, the US Senate had amended Defence Bill 85-10, which included a measure killing Trump's recent deal to spare Chinese tech giant ZTE.

Commenting on that decision, analysts at Rabobank said: "Of course, there is still the House of Representatives to pass first before the damage is done, but the firm's shares have tanked again, and the president is going to have to be very persuasive given the way the political winds are blowing on China in the US."

In terms of potential responses on the part of China, the Dutch broker added: "Yet we should expect China to think strategically and reach out politically first. There will be an attempt to build an anti-Trump coalition with the EU: though who trusts China on trade?! Furthermore, the recent Trump-Kim meeting only happened with Chinese help..

"We might soon find out if there is genuine detente there due to the keys to Disneyland being dangled, or if Trump is about to lose face and face the need for military action - and once again we are back to the nuclear concept! Or, China might chose to raise geopolitical tensions elsewhere --and we aren't short of flashpoints-- to ask the question of the US: "Is it really worth it to you to pursue this simple trade issue? Are a few electronic goods worth that fight?"."