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China's trade with the USA also continued to rise in July despite the tariffs, with exports up 11.2 percent year-on-year, and imports increasing 11.1 percent.

The decision follows Washington's announcement Tuesday that it will implement levies on $16 billion of Chinese products starting from the same date.

Trump also is moving forward with plans to tax a further $200 billion in Chinese products as soon as September and has threatened to eventually impose tariffs on all Chinese imports, which totaled $505 billion previous year, unless China capitulates.

The latest USA tariffs on 279 products, including motorcycles, speedometers and antennas, will also take effect August 23.

United States president Donald Trump has threatened to target all $500bn of Chinese imports. But it held off on a final $16 billion as a result of concerns raised by USA companies.

While trade tensions are being ratcheting up, China's trade surplus with the USA stood at US$28.1 billion in July, close to the record-high in June, data released Wednesday showed. Analysts had forecast 10 per cent.

"We expect export growth to cool in the coming months, though this will primarily reflect softer global growth rather than USA tariffs, the direct impact of which will continue to be mostly offset by the renminbi's (yuan's) recent depreciation".

"Retaliatory tariff hikes by trading partners can also affect domestic investment by curtailing the demand for US exports", Atlanta Fed Research Director David Altig wrote on a blog posted on the bank's website. At the weekend, Mr Trump said he had the upper hand in the trade war, while Beijing responded through state media by saying it was ready to endure the economic fallout. The list is heavy on industrial products such as steam turbines and iron girders.

USTR is conducting a public comment period for those tariffs, which could reach 25 percent, due to end September 5.

Administration officials believe that the $505 billion Americans spend on Chinese products each year gives them leverage over China.

But the Chinese government can employ other tools if the conflict continues.

China deprives USA companies of the ability to set market-based terms in licensing and other technology-related negotiations. "We have been very clear about the specific changes China should undertake".

After months of escalation, business communities in both countries are wondering when and how the trade confrontation will end. That's 24% of all Washington exports according to the Washington Department of Agriculture.


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