U.S.-China tariff dispute about to start intensifying
BEIJING — President Donald Trump’s first tariffs are scheduled to hit $34 billion of Chinese imports today, and Beijing plans to swiftly respond with levies on an equal amount of goods.
Border officers could receive the order as early as midnight to slap new taxes on hundreds of American products, including pork, poultry, soybeans and corn.
And so would begin an unprecedented commerce battle between the world’s two largest economies — a conflict some analysts fear could cripple trade and undermine ties between the United States and China at a time when the administration seeks Beijing’s cooperation on North Korea.
Thus far, Trump has showed no interest in a last-minute truce.
The president repeatedly has decried the U.S. trade deficit with China, which totaled $375.6 billion last year, and the nation’s deficits with other trading partners, arguing those countries maintain higher trade barriers relative to the United States that leaves America at a disadvantage.
“They must play fair or they will pay tariffs!” Trump tweeted June 26. He also has said the tariffs would be in response to what the administration claims is Chinese theft of U.S. intellectual property.
China’s response? We did not start this, but we will fight back.
China is moving to pin the fallout on Trump, framing the United States as a bully the Asian nation is forced to confront. A state media edi- torial this week called America’s “dictatorial bent” a global threat, while officials said China will “absolutely not” On June 15, President Donald Trump said the U.S. would begin charging additional duties of 25 percent on $50 billion worth of Chinese imports in response to the U.S. trade deficit with China and what he says is theft of American intellectual property. That’s split into two rounds — $34 billion now and $16 billion later.
In response, China said it will fight back with levies on U.S. soybeans, corn, wheat, rice, sorghum, beef, pork, poultry, fish, diary products, nuts and vegetables, and autos. The first wave of
U.S. tariffs takes effect today. China’s response will become effective “immediately” thereafter. take the first swing.
“As long as the U.S. side rolls out its tariffs list, China will respond with all necessary measures to firmly safeguard our legitimate rights and interests,” Foreign Ministry spokesman Lu Kang told reporters Wednesday.
Those measures appear to be aimed at America’s heartland, which helped lift Trump into the White House. Farmers in the Midwest fear they’ll lose access to China’s lucrative market and be left with the bill for excess produce and livestock.
What happens next is anyone’s guess, analysts say, since both sides have pledged not to back down.
“It’s a dark day tomorrow for global trade,” predicted Joerg Wuttke, former president of the European Union Chamber of Commerce in China.
Uncertainty hangs over companies, supply chains and investment plans, he said. American firms in China are already reporting spikes in random inspections at ports.
One U.S. manufacturer said Chinese authorities on average used to inspect 2 percent of the vehicles it sent abroad. Since June, agents have taken a closer look at every product.
“Don’t expect the ‘war’ to be out in the open in some imaginary tit-for-tat tariff battlefield,” said James Zimmerman, a partner in the Beijing office of international law firm Perkins Coie. “The real battle will be on the flanks” — in the form of unnecessary inspections, product quarantines and heightened regulatory scrutiny.
Trump administration officials contend fears the tariffs will hurt American workers are overblown and fairer trade with China ultimately will benefit U.S. companies and workers.
“We think you’ll continue to see very strong employment,” Commerce Secretary Wilbur Ross told Bloomberg Television last week.
The conflict over U.S.-China trade has been brewing for years but has intensified rapidly in 2018. On April 3, the U.S. released a list of targets for proposed tariffs on $50 billion worth of Chinese imports, taking aim at high-tech and industrial goods. On April 4, China fired back.
In the months since, the tit-for-tat has escalated, with the U.S. threatening successive rounds of tariffs on goods valued at hundreds of billions of dollars. China vowed to match U.S. moves, using both quantitative and qualitative measures.