Trade fears heating up
FEARS of a global trade war were ignited this week when China issued a US$50 billion list of American goods slated for tariff hikes.
The list includes agricultural products, notably soybeans, and is the latest step in an escalating and potentially damaging technology dispute with Washington.
China’s tax agency gave no date for the 25 percent increase to take effect and said that would depend on what President Donald Trump does about US plans to raise duties on a similar amount of Chinese goods.
Beijing’s list of 106 products included the biggest US exports to China, reflecting its intense sensitivity to the dispute over American complaints that it pressures foreign companies to hand over technology.
The clash reflects the tension between Trump’s promises to narrow a US trade deficit with China that stood at US $375.2 billion last year and the ruling Communist Party’s development ambitions.
Regulators use access to China’s vast market as leverage to press foreign automakers and other companies to help create or improve industries and technology.
A list the US issued earlier of products subject to tariff hikes included aerospace, telecoms and machinery, striking at developing high-tech industries in China.
China said it would immediately challenge the US move in the World Trade Organisation.
Deputy finance minister, Zhu Guangyao, appealed to Washington to “work in a constructive manner” and hurting both countries.
Zhu warned against expecting Beijing to back down.
“Pressure from the outside will only urge and encourage the Chinese people to work even harder,” Zhu said.
Companies and economists have expressed concern improved global economic activity might sputter if other governments are prompted to raise their own import barriers.
“US companies at this point would like to see robust communication between the US government and the Chinese government and serious negotiation on both sides, hopefully to avoid a trade war,” said the chairman of the American Chamber of Commerce in China, William Zarit.
The list of US products under threat of tariff hikes includes soybeans, beef and whisky. China is the largest market for US soy and the threat of tariffs on exports of the commodity has the potential to whip up trade anxieties. avoid