China defiant as Trump adviser admits U.S. consumers pay tariffs

White House expects China to retaliate over trade tariffs

Kudlow added, "Both sides will pay", but he stipulated that China "will suffer (economic) losses" from reduced exports to the U.S., not from paying the tariffs.

Wall Street stocks plunged on Monday, with losses on Nasdaq exceeding three per cent, after China announced it was ramping up tariffs on United States goods, escalating the year-long trade dispute. The now 25% tariffs are meant as a punishment to China for the country's refusal to accept the Trump Administration's latest version of a potential trade deal. The administration has already hit $50bn of additional Chinese goods with 25 percent duties.

Tariff toll: Workers producing USA flags at a factory in China.

And the president has publicly complained about government subsidies that lower Chinese companies' operating costs, along with a sustained effort to devalue the Yuan, tactics that make Chinese products progressively cheaper to buy. "China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway".

The "points" are a reference to the percentage increase in tariffs on Chinese goods, from 4 per cent to 25 per cent, compared to a more modest tariff hike the Chinese have recently enforced in the other direction.

Chinese officials gave no indication Monday what steps they might take after threatening "necessary countermeasures" for Trump's penalties on $200 billion of Chinese goods, imposed Friday.

Separately, the U.S. Commerce Department said on Monday six Chinese technology entities were among those it had banned from exporting sensitive U.S. technologies and other goods.

Independent economists, though, think the effect would be larger.

Trump's hard line on China has been largely cheered by politicians in Washington, though Democrats have accused the president of alienating allies who might help apply more pressure on Beijing.

On Friday, Chinese Vice Premier Liu said trade talks between China and the U.SO, which lasted for just two hours, "went fairly well" and that "talks would continue".

"This is the kind of response we should expect from China going forward".

It said Beijing was open to talks but would not yield on important issues of principle.

China's nationalist Global Times tabloid also said in an editorial on Monday that the country had no reasons to fear a trade war. By doing so, China was dreaming, he said.

Trump has railed against the Chinese since the middle of his 2016 presidential campaign, complaining about unfair trade practices that put Beijing at an advantage. "However, once the country is strategically coerced, nothing is unbearable for China in order to safeguard its sovereignty and dignity as well as the long-term development rights of the Chinese people".

President Donald Trump, however, has struck a defiant tone. It also accuses China of stealing intellectual property from U.S. firms. Trump also ordered the Office of the United States Trade Representative (USTR), to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion.

As for future negotiations, while there are "no concrete, definite plans yet", Kudlow said China had invited Treasury Secretary Steven Mnuchin and Lighthizer to Beijing - and higher-level discussions could be possible.

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