Crude slides after China announces tariff on U.S. oil products

The White House reportedly had a private meeting with tech industry representatives last week.                  Daniel Terdiman  CNET

The White House reportedly had a private meeting with tech industry representatives last week. Daniel Terdiman CNET

China on Wednesday said it would impose tariffs on an additional $16 billion in USA autos and energy products, retaliating for the Trump administration's latest import levies on an equivalent value of Chinese goods.

And the conflict is likely to escalate: The administration is preparing tariffs of up to 25 percent on an additional $200 billion in Chinese products.

All China's main state newspapers published a lengthy commentary by the official Xinhua news agency, entitled "declaration", on their front pages.

On Wednesday, the Office of the United States Trade Representative (USTR) released a list of around US$16 billion worth of imports from China that will be subject to a 25-percent additional tariff as part of the United States' response to China's unfair trade practices related to the forced transfer of American technology and intellectual property, the office said. China immediately retaliated with similar tariffs on US goods, including soybeans, pork and poultry, which were created to hurt Trump voters in rural America.

China deprives USA companies of the ability to set market-based terms in licensing and other technology-related negotiations.

China, on the other hand, argues that the tariffs violate World Trade Organization rules and only harm both countries.

The tariffs will be activated on August 23, the ministry said, the same day that the United States plans to begin collecting 25 per cent extra in tariffs on $16 billion U.S. in Chinese goods.

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The US has said the tariffs are meant to penalise China for "unfair" trade practices, such as rules that compel companies in certain sectors to take on local partners if they want to do business in the country.

China's exports surged more than expected in July despite USA duties and its closely watched surplus with the United States remained near record highs, as the world's two major economic powers ramp up a bitter dispute that some fear could derail global growth.

In the meantime, it sought public comment on the new items. It would take a few more weeks to revise the list and make programming changes at U.S. Customs and Border Protection to begin collecting the duties.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said the escalation "is just reminding investors that their trade war concerns are going nowhere anytime soon".

The United States and China trade goods and services worth about $650 billion each year, the largest trading relationship in the world between two countries.

Trump administration efforts to force China into concessions also have been complicated by the falling yuan, which has lost more than 8 percent of its value against the dollar since April.

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