Vietnam posts $3.1-billion trade surplus in Jan-July

An investor sits in front of private stock trading boards at a private stock market in Kuala Lumpur. – AP

The Trump administration plans to propose slapping a 25-percent tariff on $200 billion of imported Chinese goods after initially setting them at 10 percent, in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday.

Lighthizer noted that if tariffs are increased to 25 percent, they would be applied to the proposed list of products that were announced on July 10.

China is threatening to impose the tariffs on a wide range of products, including chemicals, plastics and leather goods, according to business groups representing those industries.

Reuters said the escalation could be announced as soon as Wednesday.

Trump also got more pushback on his tariff plans from the U.S. Congress on Wednesday as a bipartisan group of senators, led by Republican Rob Portman of OH, launched new legislation that would scale back the president's power to impose tariffs for national security reasons under a Cold War-era trade law. In July it accused the United States of bullying and warned it would hit back.

Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent USA business groups have condemned Trump's aggressive tariffs.

Trump has threatened to slap tariffs on virtually all of China's exports to the United States.

Many U.S. ports, both air and sea, are witnessing record import volumes.

So far, the United States has imposed duties on $34 billion of imports from China as part of a first tranche of sanctions on $50 billion of goods.

Oil Price.com, an industry site, reports that China said on Wednesday that it would respond with quick retaliation if the USA moves forward with higher tariffs.

The higher tariff rate, if implemented, would apply to a list of goods valued at US$200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of USA tariffs on US$34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

"This week, the President has directed that I consider increasing the proposed level of the additional duty from 10 percent to 25 percent", Lighthizer said in a statement.

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints that Beijing's technology development tactics hurt American companies.

Economic expansions tend to be cyclical, and even within each expansion there are spurts of rapid growth followed by more sluggish intervals, so the administration can not count on the recent spurt to be sustained.Businesses are already starting to report widespread increases in input costs, in part as a result of steel and aluminium tariffs.

"We have been very clear about the specific changes China should undertake".

Beijing's earlier round of tariffs appeared created to minimize the impact on the Chinese economy by targeting soybeans, whiskey and other goods available from Brazil, Australia and other suppliers.

Chinese leaders have offered to narrow their politically sensitive trade surplus with the United States by purchasing more American goods.

Hearings are scheduled for Aug. 20 to 23 and the comment period has been extended to September 5 from late August, according to Lighthizer's office.

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