Trump proceeds with 25 percent import tariffs on $16b of Chinese products

United States President Donald Trump is going ahead with imposing 25 percent tariffs on $16 billion of Chinese imports, the latest development in the trade war between the two nations that could severely weaken both economies.

Customs officials will begin collecting the border tax on a list of imports on August 23, the Office of the US Trade Representative has said, which is heavy on industrial products including steam turbines and iron girders.

Trump is also readying tariffs on an additional $200 billion across 6,031 Chinese product lines. The Trump administration plans to put a 25 percent tariff on these imports, having previously proposed 10 percent. The Office of the US Trade Representative is due to make a final decision on this after the end of this month.

Both sets of taxes are in addition to 25 percent tariffs that took effect on July 6 on $34 billion in Chinese products. China since responded with tariffs of its own by preparing retaliatory duties of 25 percent on the same amount of US products.

Trump has warned that he could tax up to $550 billion in Chinese products, exceeding the US' total imports from China during 2017.

Trump started his trade war with China in March by imposing higher tariffs, after saying an investigation had found that China is using foreign ownership restrictions to require tech transfers from US to Chinese companies, as well as conducting espionage to acquire intellectual property.

Trump's administration has also been cracking down on all Chinese involvement in the American tech sphere, including with draft legislation barring the sale of national security-sensitive technology to China and blocking government or contractors from buying telecommunications equipment and services from Chinese heavyweights Huawei and ZTE.

Both companies faced a heavy drop in sales in the US, after the country's intelligence chiefs recommended its citizens not to use their products, citing concerns over "allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks".

Last month, the US Commerce Department lifted its export ban on ZTE, after the Chinese telecom giant deposited the final tranche of a $1.4 billion penalty the US imposed against it.

The ban was imposed after the US government determined that ZTE violated terms of a 2017 settlement, reached after ZTE illegally shipped US equipment to Iran and North Korea .

The Trump administration then reached a deal to lift the ban and keep ZTE alive. White House trade adviser Peter Navarro at the time said Trump did this as a personal favour to the president of China and that ZTE would be "shut down" in the US if it engaged in any more bad activity.

The US administration also ordered the Federal Communications Commission to deny China Mobile entry to the US telecommunications industry at the start of July, citing "substantial and unacceptable risk to US law enforcement and foreign intelligence collection".

Trump is also considering setting standards for a nationwide 5G mobile network to prevent Chinese dominance in the industry, alleged government documents leaked in January revealed.

A trade war between the two powerhouses could shave off 0.25 percent of the GDP of both of their economies this year, according to research by Singapore's DBS Bank, with more damage expected in 2019.

US-China trade showed strong year-on-year growth in July, however, according to Chinese customs data, suggesting that companies are rushing to fill orders while they can.

Chinese exports to the US grew 11.2 percent year on year to $41.5 billion; imports grew 11.1 percent to $13.4 billion; while overall trade between the two countries grew 11.2 percent.

With AAP

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