US ramps up trade fight with new tariffs

A trade war between Washington and Beijing escalated on Monday, as the Trump administration announced that a new round of tariffs on $200 billion of Chinese imports will start at 10 percent next week, a move that was swiftly criticized by some US industrial groups.

The tariffs, which will go into effect on Monday, will rise to 25 percent on Jan 1, US President Donald Trump said in a statement. He warned that if China takes “retaliatory action” against US farmers or industries, tariffs will be pursued on “approximately $267 billion of additional imports”.

The two countries already have slapped hefty duties on $50 billion of each other’s goods.

“If the US imposes any additional tariffs on China, we will have to take necessary countermeasures and resolutely safeguard our legitimate and legal rights and interests,” Foreign Ministry spokesman Geng Shuang said earlier on Monday.

... We will have to take necessary countermeasures and ... safeguard our legitimate and legal rights ... ”

Geng Shuang, Foreign Ministry spokesman

In commenting on a US report that China might be considering skipping trade talks if the US initiated another round of tariffs, Geng said the escalating trade dispute serves the interests of neither side.

“We always believe that dialogue and consultation on the basis of equality, good faith and mutual respect make the only viable way out for the China-US trade issues,” Geng told a regular news conference before Trump’s announcement.

Trump, in his statement announcing the new round of tariffs, also said, “Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection.”

The White House economic adviser Larry Kudlow said earlier on Monday at the Economic Club of New York that the US was ready to negotiate a trade deal with China whenever Beijing was prepared for “serious talks” that will reduce tariffs and eliminate non-tariff trade barriers, Reuters reported.

The US trade representative’s office has removed nearly 300 product categories from the latest tariff list, along with some subsets of other categories. The products include iPhone, smart watches, Bluetooth devices, and some consumer safety products made in China.

US industrial groups, along with a broad cross-section of US businesses, voiced their strong opposition during six days of hearings last month. They expressed dissatisfaction with the adjustments and were quick to pan the announcement.

“The US economy runs on pro-growth policies, but that’s not what tariffs on $200 billion worth of Chinese goods deliver,” US Chamber of Commerce President and CEO Thomas J. Donohue said.

“Today’s decision makes clear that the administration did not heed the numerous warnings from American consumers and businesses about rising costs and lost jobs on Main Street, in factories, and on farms and ranches across the country,” he said in a statement.

The United States Council for International Business, which represents America’s most competitive global companies, said US companies and consumers already are feeling the impact of earlier tariffs.

“The administration’s latest moves will only make matters worse,” the council said in an email to China Daily.

Matthew Shay, president and CEO of the National Retail Federation, said that it was disappointing that the administration continues to advance what he called harmful tariff policies that threaten to weaken the US economy.

“We cannot afford further escalation, especially with the holiday shopping season right around the corner,” Shay said.

Speaking at the Conference on Sino-US Economic and Trade Relations in the Global Economy on Monday in Washington, Jacob J. Lew, former US Treasury secretary, said the Trump administration tariffs are likely to make matters worse, and its rhetoric “lacks the respect that we should show between two great nations”.

“There will be no winners if a trade war continues, and that is especially true for working people. This ill-conceived trade policy has failed to achieve its objectives, as the trade deficit reached record levels this summer,” he said at the meeting, which was sponsored by the Peterson Institute for International Economics (PIIE) and the Chinese Academy of Social Sciences (CAAS).

Xie Fuzhan, president of the CAAS, also said the trade war, provoked by the US, was “irrational”.

“The Sino-US trade war is not a benign competition, and it does not serve the fundamental interests of the two peoples,” Xie said.