President Trump's consultation has been analysing the expediency of placing tariffs on Chinese goods coming to the US worth around $200 billion, roughly 40% of all its exports to the US. Trump himself, who is the spearhead of the trade war, is believed to be pushing for the imposition of the tariffs. The tariffs would be set at a level of 25%.
Placing tariffs on $200 billion of Chinese goods would mark the biggest single escalation of the trade conflict so far, and would be almost guaranteed to lead to a further escalation in the form of retaliatory tariffs from the Chinese government.
Beijing has already threatened to impose tariffs on $60 billion (about R920 billion) worth of US goods in response, and on Thursday morning reiterated this stance with Ministry of Commerce spokesperson Gao Feng telling reporters that China "will have to retaliate," in the event that the US levies more tariffs.
Should China follow through with its threat of retaliation, it would likely push the Trump administration to consider moving towards the president's ultimate threat: tariffs on all goods coming in from China.
Trump has previously made clear he'd be willing to place tariffs on all Chinese goods coming to the US, telling CNBC in an interview in July that he was "ready to go to 500." The "500" figure alludes to the roughly $500 billion of Chinese goods imported to the USA in 2017.
US Census Bureau data put the official figure for last year at $505 billion.
"I'm not doing this for politics — I'm doing this to do the right thing for our country," he said at the time. "We have been ripped off by China for a long time."
Such a move would effectively end the tit-for-tat trade battle between the two nations, as Chinese imports from the US are a comparatively small $129.9 billion.
Economists say a full-blown trade war, with tariffs on all goods between the two countries, would result in substantial price increases for US businesses and consumers. Such a huge trade war would also drag on US economic growth, and most likely, wider global growth.
As the Trump administration's decision on a fresh round of tariffs looms, there is further evidence that the trade war in its current state is already causing major issues globally, with officials from German industry on Thursday blaming a fall in activity in the country's factories at least partly on the trade war.
"Order intake in the manufacturing sector has slowed noticeably since the beginning of the year after a very dynamic second half of 2017," the German economy ministry said after data showed the amount of orders for German goods falling 0.9% last month.
"The worldwide uncertainty caused by trade conflicts probably played a role here," the ministry added.
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