WORLD China strikes back on tariffs
BEIJING: China fired back yesterday in a spiralling trade dispute with President Donald Trump by raising import duties on a $34 billion list of American goods including soybeans, electric cars and whiskey.
The government said it was responding in “equal scale” to Mr Trump’s tariff hike on Chinese goods in a conflict over Beijing’s trade surplus and technology policy that companies worry could quickly escalate and chill global economic growth.
“The Chinese side doesn’t want to fight a trade war, but facing the short-sightedness of the US side, China has to fight back strongly,” said a Commerce Ministry statement.
The ministry said it was scrapping deals to narrow Beijing’s multibillion-dollar trade surplus with the US by purchasing more American farm goods, natural gas and other products.
Beijing will impose an additional 25 per cent tariff starting July 6 on 545 products from the US including soybeans, electric cars, orange juice, whiskey, salmon and cigars, according to the Ministry of Finance.
Most are food and other farm goods, hitting Mr Trump’s rural supporters hardest. Beijing appeared to be trying to minimise the impact on its own economy by picking US products that can be replaced by imports from other suppliers such as Brazil or Australia.
Chinese regulators also are considering a tariff hike on an additional 114 products including medical equipment and energy products, the Finance Ministry said. That mirrored the Trump administration’s announcement on Friday of a tariff hike on $34 billion of Chinese goods and plans to consider widening it to an additional $16 billion of other products.
“The Chinese side doesn’t want to fight a trade war”
“China’s retaliation will remain calibrated and largely reciprocal, with President Xi Jinping ready to counter any move by Trump,” said Eurasia Group in a report.
“Beijing has a freer hand for informal retaliation, which will now start to increase.”
Mr Trump is pressing Beijing to narrow its trade surplus with the US and roll back its plans for state-led development of Chinese global competitors in technology fields including electric cars, renewable energy, artificial intelligence and biotech.
Washington, Europe, Japan and other trading partners complain Beijing’s tactics including outright theft of foreign technology and subsidies and protection from competition for fledgling Chinese industries.
They say those violate Chinese market-opening commitments under the World Trade Organisation.
Tensions eased temporarily after Chinese negotiators agreed in May at talks in Washington to buy more American farm goods, natural gas and other products. American officials said they would suspend threatened tariff increases on up to $150 billion of Chinese goods.
The dispute revived after the White House renewed its plan for a tariff hike on $50 billion of Chinese goods as part of the technology dispute.