China strikes back against US in growing trade war
WASHINGTON/BEIJING: China struck back against US President Donald Trump’s trade offensive, intensifying the expanding and unpredictable dispute between the world’s two largest economies.
China announced it was expanding its existing complaint against the United States at the World Trade Organisation, hours after the countries slapped tit-for-tat tariffs on billions of dollars of cross-border trade.
Beijing called the new stage of the confrontation – which began when Washington pulled the trigger on 25 per cent duties on US$34 billion annual imports of Chinese machinery, electronics and other goods – ‘the largest trade war in economic history.’ And China’s foreign ministry said retaliatory tariffs of equal size and scope had taken effect ‘immediately.’
There was confusion about exactly what US products would be hit in the initial wave of tariffs as China’s Commerce Ministry had not published an updated list.
Economists have warned escalating trade frictions could throttle global growth and strike at the heart of the world trading system, causing economic shockwaves and potentially disrupting years of global growth.
The new tariffs could just be the opening skirmish in the trade war, as US President Donald Trump has vowed to hit as much as US$450 billion in Chinese goods, the vast majority of that country’s imports.
That would add to disputes underway with Canada, Mexico and the European Union, which could worsen if he goes ahead with threatened tariffs on autos.
China’s government also announced it was adding this round of US tariffs to an existing complaint filed with the WTO in April shortly after Washington unveiled the threat to punish Beijing for its policies on intellectual property.
Months of dialogue between the two economic superpowers, including in the WTO, appeared to have failed, with Trump warning just hours before the tariffs came into effect that Washington was ready to escalate the dispute with duties on hundreds of billions of dollars more in Chinese imports.
Trump repeatedly has slammed what he describes as Beijing’s underhanded economic treatment of the United States. The US trade deficit in goods with China ballooned to a record US$375.2 billion last year, stoking his ire.
US officials accuse China of building its industrial dominance by stealing the ‘crown jewels’ of American technological knowhow through cyber-theft, forced transfers of intellectual property and state-sponsored corporate acquisitions.
Despite dire warnings about the impact on the US, Trump believes the robust American economy can outlast its rivals in the current battle. But China also believes its economy, with a greater focus on domestic demand and a reduced dependence on exports, can ride out the storm.
China central banker Ma Jun said the first punches will have only a ‘limited impact’ on the nation’s economy, trimming GDP growth by 0.2 percentage points.
With only US$130 billion in US imports to retaliate against, Beijing has said it will take ‘qualitative’ and ‘quantitative’ measures against the US, triggering fears it could cripple the operations of US multinationals operating there. — AFP