China targets $3B of U.S. goods in tariff spat

BEIJING — China announced a $3 billion list of U.S. goods for possible retaliation in a tariff dispute with President Donald Trump and girded Friday for a bigger battle over technology policy as financial markets sank on fears of global disruption.

The Commerce Ministry said higher duties on pork, apples, steel pipe and other goods would offset Chinese losses because of Trump’s tariff hike on steel and aluminum imports.

It urged Washington to negotiate a settlement but set no deadline.

Trump said Friday that he was not concerned that the tariffs would be a drag on the stock market.

“China is going to end up treating us fairly,” he said.

In a separate and potentially bigger dispute, the ministry criticized Trump’s decision Thursday to approve a possible tariff hike on Chinese imports worth up to $60 billion over Beijing’s technology policy.

It gave no indication of a response, but a foreign ministry spokeswoman said Beijing was “fully prepared to defend” its interests.

“We don’t want a trade war, but we are not afraid of it,” said the spokeswoman Hua Chunying.

On Wall Street, stocks were mixed, but Asian financial markets sank on concern the escalating tensions might disrupt the biggest global trading relationship or lead other nations to raise import barriers. Tokyo’s benchmark tumbled by an unusually large 5.1 percent while the Shanghai Composite Index closed down 3.4 percent.

The dollar dipped to 104.90 yen as investors shifted into the Japanese currency, viewed as a “safe haven” from risk.

China’s response Friday appeared to be aimed at increasing domestic U.S. pressure on Trump by making clear which exporters, including farm areas that voted for him, might suffer.

“Beijing is extending an olive branch and urging the U.S. to resolve trade disputes through dialogue rather than tariffs,” said economist Vishnu Varathan of Mizuho Bank in a report.

The list announced was linked to Trump’s steel and aluminum tariffs, but companies already were looking ahead to a battle over complaints Beijing steals or forces companies to hand over technology.

The tensions reflect the dueling nationalistic ambitions of Trump and his Chinese counterpart, Xi Jinping.

U.S. efforts to boost exports of technology-based goods, begun under Trump’s predecessor, Barack Obama, conflict with China’s plan for stateled development of global competitors in fields from robotics to electric cars.

Foreign business groups complain the Chinese are trying to squeeze them out of promising industries.

The Commerce Ministry announcement Friday made no mention of jetliners, soybeans or other products that are the biggest U.S. exports to China by value.

That leaves Beijing room to take more drastic steps.

Chinese officials are trying to figure out how to address U.S. concerns, said Jake Parker, vice president for China operations of the U.S.-China Business Council, which represents American companies that do business with China.

“Until the Trump administration articulates those concerns and how China can address them, it’s going to be very, very difficult for China to make those changes,” said Parker.

Washington think it needs Chinese leaders list of requests doesn’t to give another because they already know what the United States wants, said a senior U.S. official, who requested anonymity.

He said Trump and Xi agreed last year on a 100day agenda of trade-liberalization measures, but Beijing failed to act on about half of them.

The Trump administration wants Chinese leaders to address more basic structural issues that interfere with market forces, said the official.

The U.S. steel and aluminum tariffs have also irked Japan.

“We have repeatedly told the U.S. side that steel and aluminum imports from its ally Japan will not adversely affect America’s national security, and that Japan should be excluded,” said Chief Cabinet Secretary Yoshihide Suga.