US President Donald Trump has threatened to impose a 10 percent tariff on US$200 billion (RM799.5 billion) worth of Chinese goods, escalating a tit-for-tat trade war with Beijing.

In a statement yesterday, Trump said he had asked the US trade representative to identify the Chinese products to be subject to the new tariffs. He said the move would be in retaliation for China's decision to raise tariffs on US$50 billion (RM199.8 billion) in US goods.

"After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced," Trump said.

Washington and Beijing appeared increasingly headed toward open trade conflict after negotiations failed to resolve US complaints over Chinese industrial policies, lack of market access in China and a US$375 billion (RM1.499 trillion) US trade deficit.

Last Friday, Trump said he was pushing ahead with a 25 percent tariff on US$50 billion worth of Chinese products, prompting Beijing to respond in kind.

The Chinese response clearly angered Trump.

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology. Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong," he said.

Trump said if China increases its tariffs again in response to the latest US move, "we will meet that action by pursuing additional tariffs on another US$200 billion of goods".

A spokesperson for the US Trade Representative's Office said that the new list of US$200 billion in Chinese goods targeted for 10 percent tariffs would replace the previous US$100 billion list that Trump ordered to be prepared in early April as a response to China's first round of US$50 billion in retaliatory tariffs.

Trump said he has "an excellent relationship" with Chinese President Xi Jinping (photo above) and they "will continue working together on many issues."

But, Trump said, "the United States will no longer be taken advantage of on trade by China and other countries in the world".

Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, said China will soon run out of imports of US goods on which to impose retaliatory tariffs, as it only imported US$130 billion worth of American goods last year. It would likely next seek to punish US companies doing business in China.

Scissors added that China was unlikely to respond to an announcement of tariffs with changes in industrial policies. Those could take a long and painful trade fight.

"As I've said from the beginning, China will back off its industrial plans only when US trade measures are large and lasting enough to threaten the influx of foreign exchange. Not due to announcements," he said.

- Reuters