Trade War: Trump says tariffs are working

Many economists say that Trump's focus on trade deficits is misguided and that large trade deficits simply show increased domestic demand.

It is indeed due to the lack of meaningful consultation between China and the US that Beijing has made a decision to elevate the stakes in a manner that is directly reflective of Donald Trump's unwillingness to negotiate a new era in Sino-US trading relations on a win-win model.

Trump's desire for others to play along with his drama is "wishful thinking", a commentary on the paper's front page said, arguing that the United States had escalated trade friction with China and turned worldwide trade into a "zero-sum game".

"Governing a country is not like doing business", the paper said, adding that Trump's actions imperilled the national credibility of the United States.

The heated dispute between the world's two biggest economies has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent months.

Trump has repeatedly used the threat of tariffs to try to force concessions from a range of US trading partners around the globe, and this approach has had mixed success.

Most major USA crops were already hit by previously announced Chinese duties, so the fresh duties announced Friday on about $60 billion worth of American goods is leaving the farm largely unscathed.

The move is in response to threats by the Trump administration to raise the tariff rate on an additional $200 billion worth of Chinese goods.

Duties ranging from 5 per cent to 25 per cent will be levied on 5,207 kinds of American imports if the USA delivers its proposed taxes on another US$200 billion of Chinese goods, the Ministry of Finance said in a statement on its website late Friday.

The trade war, rising corporate bankruptcies, and a steep decline in the value of the yuan versus the dollar have raised concerns that China's economy could face a steeper slowdown.

A container ship was docked at a port in Qingdao, in eastern China's Shandong Province, on July 6.

The ministry also said that the U.S. measures violated the World Trade Organization rules and damaged China's interests. Taken in totality, the new Chinese proposals will cover $60 billion in United States imports.

A ministry statement said, "China is forced to take countermeasures".

Still, despite the data, Trump reiterated in a tweet Sunday that his tariffs are working "big time".

China has now either imposed or proposed tariffs on $110 billion of USA goods, representing the vast majority of China's annual imports of American products.

China's surplus with the USA swelled to a record in June as exports continued to rise, though signs of front-loading orders suggest the spike may have been a one-off.

His tweets came amid a new surge in trade tensions with China. The inquiry found that Chinese theft of US intellectual property was costing the USA economy billions of dollars.

The Chinese government has said that it will make a final decision on if, when, and how these tariffs will be implemented next month.

China is trying to seek an "equal" position in future talks with the United States with today's retaliation announcement, said Gai Xinzhe, analyst at the Bank of China's Institute of International Finance in Beijing. Trump has imposed tariffs on certain goods imported from foreign countries, but the foreign countries do not pay those tariffs.

'We have really rebuilt China, and it's time that we rebuild our own country now, ' Trump said.