US raises tariff stakes, again
Washington threatens tariffs on $270b worth of Chinese goods, China calls it ‘completely unacceptable’
WASHINGTON/BEIJING The Trump administration raised the stakes in its trade dispute with China, threatening 10 per cent tariffs on a list of US$200 billion (S$270 billion) worth of Chinese imports, sending stocks lower and prompting Beijing to warn that it would be forced to respond.
China’s Commerce Ministry said yesterday that it was “shocked” and would complain to the World Trade Organisation. It called the US actions “completely unacceptable”.
Beijing has said it would hit back against Washington’s escalating tariff measures, a threat that US businesses in China fear could mean anything from stepped-up inspections to even consumer boycotts.
The US$200 billion far exceeds the total value of goods China imports from the US, which means Beijing may need to think of creative ways to respond to such US measures.
On Tuesday, US officials issued a list of thousands of Chinese imports the Trump administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminium, prompting criticism from some US industry groups.
It includes consumer goods from car tyres to toilet paper.
“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market and engage in true market competition,” US Trade Representative Robert Lighthizer said in announcing the proposed tariffs.
“Rather than address our legitimate concerns, China has begun to retaliate against US products ... There is no justification for such action.”
Last week, Washington imposed 25 per cent tariffs on US$34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China. Each side is planning tariffs on a further US$16 billion in goods.
Investors fear an escalating trade war between the two could hit global growth and damage sentiment.
US President Donald Trump has said he may ultimately impose tariffs on more than US$500 billion worth of Chinese goods – roughly the total amount of US imports from China last year.
The new list targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail companies and increasing the stakes for lawmakers in the Republican party facing elections in November.
The list is subject to a twomonth public comment period before taking effect.
Some US business groups and lawmakers from Mr Trump’s Republican party were critical of the escalating tariffs.
Senate Finance Committee Chairman Orrin Hatch said it “appears reckless and is not a targeted approach”.
The US Chamber of Commerce has supported Mr Trump’s domestic tax cuts and efforts to reduce regulation of businesses but does not back his tariff policies.
“Tariffs are taxes, plain and simple. Imposing taxes on another US$200 billion worth of products will raise the costs of everyday goods for American families, farmers, ranchers, workers and job creators. It will also result in retaliatory tariffs, further hurting American workers,” a Chamber spokesman said.
Mr Louis Kuijs, head of Asia Economics at Oxford Economics, said while he expects China to strongly condemn the US moves, its policy response is likely to be limited for now.
“In part because they have only limited ammunition and in part because it is still early in the process on the US side,” he said.
As its dispute with Washington deepens, Beijing has been calling on other countries to support global free trade and has talked up efforts to ease investment rules. During a recent visit to Germany by Chinese Premier Li Keqiang, the countries signed business deals worth more than US$23 billion. – REUTERS