China urges U.S. to return to reason

China appealed to Washington on Thursday to stay calm and "correct its attitude" following a USA threat to raise tariffs on US$200 billion of Chinese goods in a dispute over technology policy. "This week, the President has directed that I consider increasing the proposed level of the additional duty from 10 percent to 25 percent".

The Trump administration said it's weighing whether to increase the proposed tariff on $200 billion of Chinese goods to 25 percent from 10 percent, stepping up pressure on Beijing to change its trade practices.

China's coal demand for power generation has been rising and domestic output gains haven't been able to keep pace, meaning a draw on the seaborne market, which is already supply constrained, with major exporters Australia and Indonesia unable to boost output.

The reports from Washington indicate a further ramping up of the pressure in the trade dispute between China and the US.

Last month, Washington and Beijing imposed a first round of 25 percent tariffs on 34 billion dollars worth of each other's goods.

Officials, however, downplayed suggestions the move was meant to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Trump's tariffs by making imports cheaper.

The US and China implemented tariffs on $46 billion worth of each others' goods in July. That prompted concern among American companies that retaliation might expand to disrupting their operations in China.

Other US goods targeted by China also included semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, beef, steel products and coffee.

Beijing said it would be forced to take countermeasures to defend Chinese interests, free trade and the worldwide order.

The tougher proposal could be announced as early as Wednesday, according to the United States media. Democrats and Republicans have complained that China's ability to sell goods in the United States at a lower cost than USA companies has put thousands of American firms out of business, costing manufacturing jobs and hurting the US economy. The International Monetary Fund has cited escalating trade disputes as a growing downside risk that's threatening the strongest global economic upswing in seven years.

Washington touted its initial tariffs as being carefully constructed to avoid having a big impact on USA consumers and companies, but the expansion of the tariff lists has drawn in more goods that can not be imported from outside China.

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

The U.S. Trade Representative's Office initially had set a deadline for final public comments on the 10 percent proposed tariffs to be filed by August 30, with public hearings scheduled for August 20-23.

With the comment period extended, tariffs at the earliest would go into effect September 6, allowing companies some time to adjust.

The odd thing is that crude oil and LNG aren't subject to any formal trade tariffs, and they appear most affected, while steel, which is the target of US tariffs, is performing strongly. "It will slow the economy".