U.S.-China Trade War: Donald Trump To Raise The Stakes by Another $100 Billion?

U.S. President Donald Trump has raised the spectre of a trade war between the world’s two biggest economies when he said on Thursday that he had instructed the office of the U.S. Trade Representative (USTR) to look into an additional $100 billion in tariffs on Chinese imports. This USD 100 billion in tariffs would be on top of the measures targeting USD 50 billion worth of Chinese goods already proposed.

"In light of China's unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs," Trump said in a statement issued by the White House.

Trump's announcement came a day after Beijing announced plans to tax USD 50 billion in American products, including soybeans and small aircraft, in response to a U.S. move earlier this week to slap tariffs on USD 50 billion in Chinese imports.

China, in an effort to block Washington’s moves being implemented, has filed a complaint against U.S.’s decision to raise tariffs on Chinese goods at the World Trade Organization. The Chinese government has also warned the Trump administration against embarking on a road that many are saying will result in a much larger pool of victims than the group it is aimed at protecting. “We urge the U.S. to cease and desist” from Trump’s plan to punish China for restrictions on foreign companies operating in the county, Beijing’s embassy in Washington said in a statement. “If a trade war were initiated by the U.S., China would fight to the end to defend its own legitimate interests with all necessary measures.”

The end game of the battle that Donald Trump has started with China remains to be seen but experts warn that winning this might not be possible for the U.S. as China could dump its $1.17 trillion hoard of U.S. Treasury in retaliation thus impacting the value of the U.S. dollar.

Nitya Pandalai Nayar, an assistant professor in the department of economics at the University of Texas in Austin, highlighted some of the fallouts of a trade war between the two countries, as reported by China's Xinhua News Agency on Thursday.  She pointed out the new trade tariffs would result in 'trade shocks' for the workers across the world. "There is a broad consensus among economists that there are aggregate gains from trade, and in that sense, trade barriers are detrimental to consumers and the aggregate economy," Nayar said. She further noted that the U.S. has a bilateral trade deficit with China only in goods and not in services.

Here is U.S. President Donald Trump’s full statement:

“Following a thorough investigation under section 301 of the Trade Act of 1974, the United States Trade Representative (USTR) determined that China has repeatedly engaged in practices to unfairly obtain America’s intellectual property. The practices detailed in the USTR’s investigation have caused concern around the world. China’s illicit trade practices − ignored for years by Washington − have destroyed thousands of American factories and millions of American jobs. On April 3, 2018, the USTR announced approximately $50 billion in proposed tariffs on imports from China as an initial means to obtain the elimination of policies and practices identified in the investigation.

Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers. In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs. I have also instructed the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests.

Notwithstanding these actions, the United States is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people. Trade barriers must be taken down to enhance economic growth in America and around the world. I am committed to enabling American companies and workers to compete on a level playing field around the world, and I will never allow unfair trade practices to undermine American interests.

(The above story first appeared on LatestLY on Apr 06, 2018 07:04 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).