China's record trade surplus with United States adds fuel to trade war fire

A man walks past a screen at the Indonesia Stock Exchange building in Jakarta Indonesia

Donald Trump has warned that he has a new tranche of tariffs covering virtually all Chinese goods entering the US ready to go, as Apple warned that the US-China trade war will make its products more expensive for American consumers.

"But right now we just can't make that deal".

The moves would sharply escalate Trump's trade war with Beijing over his demands for major changes in economic, trade and technology policy.

While China's trade surplus with the United States grew again, it remained stable with the rest of the world at US$27.9 billion in August.

Signs have been growing in recent weeks that Trump wants to focus his ire on China, which he has repeatedly accused of trading unfairly. And he said he'll likely sign up updated free trade agreement with South Korea later this month when he visits the United Nations.

‪"Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive", he wrote.

"The U.S.is moving higher", Lawrence Kudlow, director of the National Economic Council, said on CNBC.

Chinese exports to the United States rose to US$44.4 billion in August, a 13.2 per cent increase from the same period a year ago, according to customs data.

But the president struck a harsher tone toward USA allies. "That said, the trade relationships and agreements that the USA has between the USA and other major economies are very complex and it's clear that several are in need of modernizing, but we think that in the vast majority of situations that tariffs are not the approach to doing that and so we're sort of encouraging dialogue and so forth".

"I think the president has reasonable political support among the electorate and his own base for action against China", said Scott Miller, a trade scholar at the Center for Strategic and International Studies in Washington. "Now, they've got to treat us fairly".

Talk of the bonus $267bn tariff package comes as the White House has yet to settle all of the specifics of the planned $200bn tariff prospoals - which, as we said, would follow up that earlier $50bn package.

On Thursday Apple joined Cisco, HP Enterprise, and other tech firms in sending a letter to U.S. Trade Representative Robert Lighthizer, warning of the potential damage tariffs could cause. The disclosure prompted its shares to turn negative.

Computer and phone makers are involved in a global supply chain that includes Chinese manufacturing, and that can not be easily excluded without harm to United States companies, Intel said in a letter to the trade representative. "Punishing my children for the crimes of my neighbors seems like a ridiculous thing for all of us to think it would be effective".

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