Tariff threat to China could push trade war
DANDONG, China — President Donald Trump’s latest threat of tariffs against China, on imports totaling roughly $200 billion, substantially raises the stakes for Beijing and could push the two countries’ trade war beyond the tit-for-tat duties seen so far.
China’s Commerce Ministry said Wednesday that the nation would act with “necessary counter-measures,” but did not say that the government would retaliate in commensurate fashion, as it has promptly done in the past. The pause in brinkmanship reflects the quandary now facing Beijing.
The new U.S. proposed levies would be on top of 25 percent tariffs that the Trump administration has assessed on $50 billion of Chinese goods, $34 billion of which took effect last Friday. On that day, China fired back with tariffs of the same amount.
But Beijing cannot match the new proposed tariffs because China imported only about $130 billion of products from the U.S. last year. By comparison, the United States imported more than $500 billion of Chinese goods last year.
Lu Xiang, a Beijing-based researcher at the Chinese Academy of Social Sciences, noted that China has previously indicated that it would retaliate in “quality and quantity,” suggesting that Beijing could employ a wide range of measures — beyond tariffs — that would hurt American businesses in China, such as tougher inspections on imports and delaying licensing and approvals for mergers.
“Chinese counter-measures are more than tariffs; it is hard to guess” what they are, Lu said. He added: “China has prepared for the worst.”
U.S. companies in China already have reported stalled product approvals, worker visas and licensing applications. A manufacturer that exports vehicles to China recorded a 98 percent jump in random border inspections in recent weeks that put the company behind schedule. And Chinese customs officers ordered a load of U.S. cherries into quarantine for a week in a coastal southeast China province, causing them to spoil.
Robert Lighthizer, the U.S. trade representative, said Tuesday night in announcing the new round of proposed tariffs that the U.S. expects China to stop unfair practices and open its markets to competition.
“Unfortunately, China has not changed its behavior — behavior that puts the future of the U.S. economy at risk,” he said. “Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action.”
The Trump administration’s latest move drew opposition from business groups and some Republican lawmakers concerned the tariffs could be a blow to U.S. consumers and damage the economy. Investors also were concerned. The Dow Jones industrial average closed down 219.21 points, or 0.9 percent, at 24,700.45.