Tit-for-tat trade row wors­ens

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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.

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