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The Trump administration's $US200 billion tariff announcement this morning means a significant escalation in the US-China trade dispute is now firmly in play.

Tariff hikes are "hitting immediately the bottom line" of companies that rely on the free flow of trade across countries, said Mats Harborn, president of the European Union Chamber of Commerce in China.

Trump last week said the United States may ultimately impose tariffs on more than $500 billion worth of Chinese goods - roughly the total amount of US imports from China previous year.

The move would be the latest in the escalating trade skirmish between the world's two biggest economies.

Some US business groups and senior politicians sharply criticized the latest action, with Senate Finance Committee Chairman Orrin Hatch, a Republican, saying it "appears reckless and is not a targeted approach". The office will hear public comments on the plan and will reach a decision after August 31, according to a senior administration official who briefed reporters on condition of anonymity.

President Donald Trump vowed to hit back on a growing list of products after China retaliated in kind for the first round of 25 per cent tariffs on $34 billion worth of imports that Washington imposed last week. China has vowed to retaliate dollar-for-dollar to any further USA tariffs.

China immediately retaliated with duties on the same value of United States goods, including soybeans and cars.




The fight with China comes as Mr. Trump is also locked in a trade war with Canada, Mexico, the European Union and other USA allies.

The president has repeatedly described his resort to tariffs - which are paid by American importers - as a lever to extract negotiating concessions from USA trading partners.

The Retail Industry Leaders Association, a lobby group representing the largest USA retailers, said: "The president has broken his promise to bring 'maximum pain on China, minimum pain on consumers'".

The new duties are "a reckless strategy that will boomerang back to harm US families and workers", said David French, the National Retail Federation's senior vice president for government relations. High-level talks between the two countries starting in May failed to deliver a breakthrough to head off a trade war. "Unfortunately, China has not changed its behavior - behavior that puts the future of the US economy at risk".

"It looks like the US just took the scale of the trade frictions to another level", Li said at a forum in Beijing.

Beijing, meanwhile, has unveiled measures to help Chinese companies absorb the US trade blows, pledging to funnel money collected from its own import levies to firms and workers tangled in the escalating trade war.

The scenario will harm United States economic growth and boost inflation. "It has to resolutely fight back while taking proper measures to help minimize the cost to domestic enterprises and further open up its economy to global investors", it said.


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