ROW OVER, THIS IS WAR
washington — US President Donald Trump announced hefty tariffs on $50 billion of Chinese imports on Friday as Beijing threatened to respond in kind, in a move that looks set to ignite a trade war between the world’s two largest economies.
Trump, whose hardline stance on trade has seen him wrangle with allies, said in a statement that a 25 per cent tariff would be imposed on a list of strategically important imports from China. He also vowed further measures if Beijing struck back.
“The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising nontariff barriers or taking punitive actions against American exporters or American companies operating in China,” Trump said in a statement.
Earlier on Friday, China vowed to do just that, saying it would strike back, just hours before Trump’s statement. Trump has already said the US would hit another $100 billion of Chinese imports if Beijing retaliated.
Washington and Beijing appeared increasingly headed toward a trade war after several rounds of negotiations failed to resolve US complaints over Chinese industrial policy, market access and a $375 billion trade gap. —
Washington — US President Donald Trump Friday announced tariffs of 25 per cent targeting tens of billions in Chinese imports, sparking immediate retaliation from Beijing and bringing the world’s two largest economies to the brink of an all-out trade war feared by markets and industry.
Making good on a pledge to punish the alleged theft of American intellectual property, Trump warned in a statement of “additional tariffs” if China hits back with tit-for-tat duties on American goods and services exports.
At least initially, though, the new tariffs will not cover the full $50 billion in trade that the White House had threatened in March.
US Trade Representative Robert Lighthizer said Friday the United States would begin collecting duties on 818 Chinese imports valued at $34 billion as of July 6.
A second tranche of 284 goods valued at $16 billion — which would bring the total to $50 billion — will undergo an additional process of review and public comment, according to the trade representative’s office.
The US can no longer tolerate losing our tech and intellectual property through unfair practices US President Donald Trump
We will immediately launch tax measures of equal scale and equal strength China’s Ministry of Commerce
“The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices,” Trump said. “These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.”
China responded swiftly, saying it has imposed “equal” tariffs on US products. “We will immediately launch tax measures of equal scale and equal strength,” the Ministry of Commerce said in a statement on its website which also called on other countries to “take collective action” against this “outdated and backwards behaviour.”
US officials say Beijing has sought industrial dominance in emerging technologies through the theft of American know-how through forced technology transfers, hacking and other forms industrial espionage.
The release of goods lists also comes after jockeying by American companies dependent on certain imports who sought exemptions for certain goods — a process that is due to continue with the second, $16 billion tranche of Chinese imports.
The trade representative’s office acknowledged public concern that the tariffs list could raise prices for consumers. “The list does not include goods commonly purchased by American consumers such as cellular telephones or televisions,” the office said.
“The threshold to come to a consensus or a compromise seems high,” Tai Hui, chief market strategist for Asia-Pacific at J.P. Morgan Asset Management wrote.
Worries about an escalating trade conflict sent shares in Chinese telecom gear maker ZTE tumbling. The company has lost 30 per cent of its market value since resuming trade this week.
Trump’s revised tariff list may exclude some consumer items from an earlier proposal to focus more on goods related to Beijing’s ‘Made in China 2025’ programme, according to a Eurasia Group report.
‘Tensions will be long-lasting’
The ‘Made in China 2025’ initiative is aimed at accelerating China’s prowess and narrowing its competitiveness gap with the United States and other industrial powers in key technologies such as robotics and semiconductors. While China has in recent months made incremental market-opening reforms in industries for which critics in the foreign business community say they were already planned, it has shown no inclination to yield on its core industrial policies.
“US-China trade tensions will be long-lasting,” Yifan Hu, regional chief investment officer and chief China economist at UBS Wealth Management, told a briefing in Beijing.
“The trade skirmish is not just about the trade deficit and exchange rates, but about the rules of the game, market openness and intellectual property. It is also about values, governance and geopolitical disagreements,” she said.