China said tit-for-tat tariffs will "destroy" trade between the world's top two economies, after Washington fired the next shot in a ballooning trade war, readying fresh levies on $200 billion in Chinese goods.
Last Friday, the U.S. imposed 25% tariffs on Chinese imports worth $34bn (£25bn). Only about 1% of the items on the list were consumer goods.
"China is showing no signs of backing down and instead looks like it is preparing for a drawn out conflict", said Scott Kennedy, deputy director of China studies at the Center for Strategic and International Studies in Washington. Chinese tactics, the administration says, include outright cybertheft and forcing United States companies to hand over technology in exchange for access to the Chinese market.
"The trade situation is worrisome but nothing more is going to happen right away. We believe the U.S. measures interfere with economic globalisation and damage the world economic order". The levies announced Tuesday - together with some US$50 billion already in the works - stand to raise import prices on nearly half of everything the USA buys from the Asian nation.
He said the administration should get back to the negotiating table with China.
"China has no option but to fight fire with fire".
In a statement USA trade representative Robert Lighthizer said these new additional tariffs are a result of "China's retaliation and failure to change its practices" after the first round of tariffs. That raises the risk China could retaliate in other ways, such as placing restrictions on USA companies doing business in the country.
"The Chinese side is shocked by the actions of the U.S.", a statement on the ministry's website declared.
Investor confidence started to return early this week amid a momentary lull in the trade war, following Beijing's retaliation tariffs on United States imports last week after Trump hit China with a 25 per cent tariff worth $34bn on imports.
Global investors have mostly looked past the intensifying trade fight between the USA and China, even as the countries move to deploy tariffs on hundreds of billions of dollars in goods.
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"Tariffs on such a broad scope of products make it inconceivable that American consumers will dodge this tax increase as prices of everyday products will be forced to rise", he said. "Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families", a Chamber spokeswoman said.
China' s Ministry of Commerce said that the tariffs are "totally unacceptable" and it is hurting the entire world, as well as China.
The Retail Industry Leaders Association, a lobby group representing the largest USA retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'".
The Retail Industry Leaders Association (RILA) was quick to condemn the proposal, saying it will punish American consumers.