Trump approves $50 billion tariffs, China plans payback
TRADE WAR Will respond immediately with ‘necessary measures to safeguard our interest’, says China WASHINGTON:
US President Donald Trump has approved tariffs on Chinese goods worth about $50 billion, said a person familiar with the decision, ratcheting up a confrontation on trade with Beijing and triggering losses in the domestic stock market.
The Trump administration is preparing to release a refined list of the first batch of Chinese products to be hit with tariffs on Friday that hones in on technologies where China wants to establish itself as a leader, according to people familiar with the matter. In April, the US revealed an initial list targeting about 1,300 products worth $50 billion in Chinese imports.
The US is also nearing completion of a second list of products ordered by Trump, worth $100 billion, which would be subject to the same public hearing process as the first, Reuters reported on Friday. That could bring a another wave of duties after 60 days or more, the report said.
The White House has said the first series of duties will be implemented “shortly” after the release of Friday’s list, though no date has been set.
“Implementation of the tariffs, when it occurs, could take us closer to a trade war,” said Shane Oliver, head of investment strat- egy at AMP Capital Investors Ltd in Sydney. “I suspect Trump also sees these announcements as a way of pressuring China into action on trade – so more classic Art of the Deal stuff.”
The Shanghai Composite Index dropped to its lowest since September 2016 and a whisker away from the 3,000-point mark, as markets await the looming announcement of the list of targets. US futures dropped after the Reuters report of the $100 billion list.
Speaking at a regular briefing on Friday, foreign ministry spokesman Geng Shuang repeated China’s threat that if the US unveils new tariffs then all previous agreements on trade will not come into effect.
Geng said that US-China economic ties are mutually beneficial, but warned that “if the US rolls out unilateralist and protectionist measures that harm China’s interests, then we will respond immediately with necessary measures to safeguard our rights and interest.”
If actual duties are imposed after months of threats and negotiations to avert them, the world’s two largest economies will be on the verge of a full-scale trade conflict that has the potential to dent the global expansion. Aside from China, Trump has lit the fuse on trade disputes with major allies, including the European Union and Canada, and railed against the multilateral trading system with his “America First” vision.
The trade tensions are escalating at an inopportune time for China’s economy. A trio of downbeat readings on Thursday and a slump in new credit growth reported earlier in the week suggest the world’s second-largest economy is already losing some momentum.
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