President Donald Trump said that if China is not willing to reach an acceptable trade deal, he is prepared to slap tariffs on all Chinese imports to the USA, which amounted to $505.5 billion past year alone.
Finally, when it comes to what China does, look no further than the Yuan, whose sharp devaluation started in mid-June, when Trump formally launched the trade war, announcing that new tariffs on $50BN in Chinese products will come into effect, followed just days later with the launch of the next, $200BN round of tariffs.
USA trade representative Robert Lighthizer had said on Wednesday that he had secured the green signal from Trump to consider raising the tariffs from the earlier planned 10% to 25% under an ongoing Section 301 targeting Chinese goods on grounds of alleged theft and forced transfer of technologies from United States companies.
US President Donald Trump (L) gestures next to China's President Xi Jinping during a business leaders event at the Great Hall of the People in Beijing on 9 November 2017.
China's government, however, shows no sign of bending to Washington's pressure.
The tariffs target a range of Chinese imports like dog food, furniture, vehicle tires, beauty products, and food products, in addition to steel and aluminum.
The public has until September 5 to comment on the proposal.
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USA trade representatives are trying to re-engage China in trade talks to de-escalate tensions between the two countries.
The Chinese have already proposed buying more US goods in order to settle the dispute, only to have the White House-which wants to win a broader argument about intellectual property and subsidies-reject the proposal.
China says the United States is trying to stop the rise of a competitor and it has imposed its own tariffs on US goods.
"It remains unchanged. The blackmailing and pressure by the United States will never work on China if the U.S. take measures to further escalate the situation we will surely take countermeasures to firmly uphold our legitimate rights and interests".
Recognizing this dynamic, a policymaker who is serious about reducing the US trade deficit would at least consider controlling capital inflows to the United States, either by creating regulations that make it more hard for foreigners to invest in the USA, or by taxing such investment.
Some US politicians expressed support for the White House move. But President Trump has done just the opposite, signing a large corporate tax cut that makes foreign investment in the US more attractive, while forcing Congress to scale back its plans to place more restrictions on Chinese investment in the United States. Now Trump administration officials are reportedly considering increasing those tariffs to 25 percent.