Time For 'Reckoning' Over China's WTO Membership, Says US

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Overseas, Beijing rejected the new tariff list as "totally unacceptable" and vowed to respond with counter-measures and an additional lawsuit at the World Trade Organisation - the third it has brought against the United States this year.

The total US debt is over 18 trillion euros.

China does not want a trade war, but it does not fear one and would fight if necessary, ministry spokesman Gao Feng told reporters at a regular briefing.

The US said that was in response to Beijing's failure to change its policies and to retaliate for last week's US tariff hike by increasing its own duties on American goods.

The Wall Street Journal, citing unnamed Chinese officials, said Beijing was considering steps including holding up licenses for USA companies, delaying approvals of mergers involving US firms and stepping up border inspections of American goods.

"Trade experts we have consulted point to the potential for anti-U.S. social media campaigns, delays or blockage of regulatory approvals, travel bans, investment restrictions, among other options", Raymond James analyst Ed Mills said in a report.

One problem for Beijing is that it imports far less from the US than it exports - much to the annoyance of Donald Trump - and that gives it less scope to retaliate - they may run out of American goods to penalise.

The president last month asked the U.S. Trade Representative's office to identify US$200 billion of Chinese goods that could be hit with 10 percent tariffs.

More than 6,000 items could be affected - including burglar alarms, vehicle tyres, handbags, baseball gloves, carpets, toilet paper, dog food, and hundreds of food products.

"For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition", U.S. Trade Representative Robert Lighthizer said in announcing the proposed tariffs. One of the officials said the USA has repeatedly made its concerns clear and continues to hope for a negotiated solution, but Beijing hasn't changed its behavior.

"Trade is critical to economic growth and supports millions of jobs from Silicon Valley to the savannahs of the heartland", Dean Garfield, chief executive of the Information Technology Industry Council, says in a statement. China responded to that action by imposing tariffs on $34 billion of USA products, and the country has vowed to take countermeasures against the current action as well.

The two sides have about seven weeks to strike a deal or continue a trade war, which will raise prices for consumers around the world.

On Wednesday, the MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.12 percent, while the main indexes in Hong Kong and Shanghai recovered somewhat after falling more than 2 percent.

The Dow Jones Industrial Average fell 200 points with Caterpillar DowDuPoint and Chevron being the biggest markets to plunge.

The onshore yuan tracked its offshore counterpart lower with traders closely watching the key 6.7 per dollar level as pressure mounted on the currency.

Washington, DC, July 11, 2018-Flooring is included on a list of products imported from China that could face tariffs of 10% from the U.S.

Members of Congress are increasingly questioning Trump's aggressive trade policies, warning that tariffs on imports raise prices for consumers and expose U.S. farmers and manufacturers to retaliation overseas.

The administration will hold hearings on the proposed list late next month.

The White House move drew immediate condemnation from Senate Finance Chairman Orrin Hatch, a Republican from Utah, who called it "reckless" and not "targeted".

Instead of careful diplomacy, Trump has been "doubling down" on abrasive tactics, said foreign policy expert Heather Conley of the Center for Strategic and International Studies.

This creates what at first seems to be a problem for China: Beijing may soon run out of American goods to tax.

'We can not turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy'.

"China seems to have no interest in bending and they will retaliate".

"This is going to drag on until they can all come to the table and agree to even the playing field". He said: "As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China's unfair trade practices and to China opening its market to US goods and services".

The additional tariffs could affect as much as $468bn in trade between the two countries, with the possibility of an ever more expansive levies that US President Donald Trump threatened to impose on China.