China urges U.S. to 'calm down' after latest tariff threat

Also a second round of tariffs on products worth $16billion could take effect as soon as this week

Bloomberg News reported, citing three unidentified sources, the Trump administration would propose imposing 25 per cent tariffs on a $200-billion list of Chinese goods targeted in a new round of penalties, up from the planned 10 per cent.

It's unclear if the Chinese government is purposely pushing the value of its currency down or if that has been a market-based reaction to concerns about how USA tariffs could hurt China's economy. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights.

Senior administration officials on Wednesday didn't directly accuse Chinese officials of manipulating the country's currency, something US officials have complained about in the past.

The drop in the PMI, a key indicator of manufacturing health in the world's second-largest economy, came as Trump's administration proposed a 25 percent tariff on another $200 billion in Chinese goods, up from an earlier 10 percent plan. The combined total of over $500 billion of goods would cover virtually all Chinese imports into the United States.

U.S. Trade Representative Robert Lighthizer said Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet U.S. demands and has imposed retaliatory tariffs on U.S. goods.

Trade officials from the world's top car-exporting nations agreed to respond if President Donald Trump slaps new US tariffs on autos and auto parts.

Meanwhile, Treasury Secretary Steven Mnuchin is reportedly privately discussing the possibility of reaching a trade agreement with China's Vice Premier Liu He.

The threatened tariffs of 10 percent could rise to 25 percent on thousands of products, including food, chemicals, steel and aluminum, furniture, tires, bicycles and beauty products. "If the United States takes further actions to escalate, China will retaliate, resolutely protecting our fair and legitimate rights", he added. Threat of a global trade war "will likely lead to elevated volatility, if not a renewed threat to the market's attempt to set a new high", says CFRA chief strategist Sam Stovall. The government will seek public comment on the higher tariffs.

Washington and Beijing are locked in battle over American accusations that China's export economy benefits from unfair policies and subsidies while stealing American technological know-how.

China's foreign ministry called this "blackmail" and warned that policies like this would "only produce the opposite of the desired result".

In July, the U.S. published a list of $200bn worth of additional products to be hit with tariffs of 10% - a figure the USA is now considering raising to 25%. It wants China to stop stealing US corporate secrets, abandon plans to boost its high-tech industries at America's expense and stop subsidizing Chinese companies with cheap loans that enable them to compete unfairly.

"This won't work on China", Geng said.

Meanwhile, in corporate America, it appears that there is just one thing executives are talking about: tariffs.

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