Trade wars: Trump poised to tax an additional $200 bn in Chinese imports

Trump administration may slap tariffs up to 25 per cent on $200 bn in Chinese imports Trump administration may slap tariffs of up to 25 per cent on $200 bn in Chinese imports | AFP

The Trump administration is most likely to slap tariffs of up to 25 per cent on an additional $200 billion in Chinese imports, escalating a confrontation between the world's two biggest economies and likely squeezing US companies that import everything from handbags to bicycle tires.

The administration could decide to begin taxing the imports equal to nearly 40 per cent of all the goods China sold the United States last year after a public comment period ends Thursday.

The administration has already imposed tariffs on $50 billion in Chinese products, and Beijing has punched back with tariffs on $50 billion in American goods. These US goods include soybeans and beef, a direct shot at supporters of President Donald Trump in the US farm belt.

China plans to tax an additional $60 billion in the US products if the Trump administration expands its hit list by $200 billion.

Trump initiated the trade war to punish Beijing for what it says are China's predatory tactics to try to supplant the US technological supremacy.

Those tactics, the Office of the US Trade Representative has alleged, include stealing trade secrets through computer hacking and forcing the US companies to hand over technology in exchange for access to the Chinese market.

In the early rounds of the hostilities, the administration targeted Chinese industrial imports to try to spare American consumers from higher import costs. But if Trump adds the $200 billion in Chinese products to the target list, American consumers would likely feel the pinch directly. And China has vowed to hit $60 billion in the US products in retaliation.

Many American companies that rely on targeted Chinese imports are bracing for the next round of tariffs to hit, with some wondering whether they can absorb the higher costs or instead will need to pass them along to their customers or find alternatives suppliers outside China.