Tit-for-tat trade row worsens
BEIJING China has fired back in a spiralling trade dispute with US President Donald Trump by raising import duties on a US$34 billion (NZ$49b) list of American goods, including soybeans, electric cars and whiskey.
The government said yesterday it was responding in ‘‘equal scale’’ to Trump’s tariff hike on Chinese goods in a conflict over Beijing’s trade surplus and technology policy, which companies worry could quickly escalate and chill global economic growth.
China ‘‘doesn’t want a trade war’’ but has to ‘‘fight back strongly,’’ said a Commerce Ministry statement. It said Beijing also was scrapping agreements to narrow its multibillion-dollar trade surplus with the US by purchasing more American farm goods, natural gas and other products.
The US and China have the world’s biggest trading relationship but official ties are increasingly strained over complaints that Beijing’s industry development tactics violate its free trade pledges and hurt American companies. Trump has been unusually direct about challenging Beijing and threatening to disrupt such a large volume of exports.
‘‘In this trade war, it’s the US who is playing the role of provocateur while China plays defence,’’ said the Global Times, a newspaper published by the ruling Communist Party. ‘‘China is a powerful guardian and has enough ammunition to defend existing trade rules and fairness.’’
Beijing will impose an additional 25 percent tariff starting on July 6 on 545 products from the US, including soybeans, electric cars, orange juice, whiskey, lobsters, salmon and cigars, according to the Ministry of Finance.
Most are food and other farm goods, hitting Trump’s rural supporters hardest.
Beijing appeared to be trying to minimise the impact on its economy by picking US products that can be replaced by imports from other suppliers such as Brazil or Australia.
Chinese regulators were also considering a tariff hike on an additional 114 products, including medical equipment and energy products, the Finance Ministry said.
It said a decision would be announced later.
The move mirrored the Trump administration’s announcement of a tariff hike on $US34b worth of Chinese goods, also due to take effect July 6, and plans to consider widening it to an additional US$16b worth of other products.
China’s heavily regulated economy also gives the AP Communist Party additional options for retaliation by withholding approval for business activity.
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 biotechnology.
Tensions eased temporarily after Chinese negotiators agreed at talks in Washington in May to buy more American farm goods, natural gas and other products. American officials said they would suspend threatened tariff increases on up to US$150b worth of Chinese goods.
The dispute revived after the White House renewed its plan for a tariff hike on US$50b worth of Chinese goods as part of the technology dispute. The Chinese government warned after another round of talks on June 3 that it would discard those deals if the tariff hike went ahead.
Businesspeople and economists say Chinese leaders are less likely to compromise on technology, because they view plans for state-led development of companies capable of competing globally in fields including electric cars, renewable energy and biotech as a route to prosperity and to restore China to its rightful role as a world leader.
Beijing has also announced plans to cut import duties on vehicles and some consumer goods and to ease limits on foreign ownership in auto manufacturing, insurance and some other industries, though those don’t directly address US complaints. AP
Lobsters are processed at a plant in St George, Maine. American lobsters are included in a set of retaliatory tariffs by China against the United States, potentially jeopardising one of their biggest markets.