U.S., China raise tariffs in new round of dispute

Rivals up the ante on their trade war

BEIJING — The United States and China went ahead with tariff hikes on billions of dollars of each other’s automobiles, factory machinery and more Thursday in an escalation of a battle over Beijing’s technology policy.

The increases came as envoys met in Washington for their first high-level talks in two months. They gave no sign of progress toward settling U.S. complaints that Beijing steals technology and its industry development plans violate free-trade commitments.

The 25 percent duties apply to $16 billion of goods from each side, like U.S. automobiles and Chinesemade factory machinery.

President Donald Trump first imposed 25 percent duties on $34 billion of Chinese imports on July 6. Beijing responded with similar penalties on the same amount of American goods.

The Chinese government criticized the increase as a violation of World Trade Organization rules and said it would file a legal challenge.

A foreign ministry spokesman, Lu Kang, declined to give details of the Washington talks.

Beijing has rejected U.S. demands to scale back plans for state-led technology development that its trading partners say violate its market-opening commitments. American officials worry they might erode the United States’ industrial leadership.

With no settlement in sight, economists warn the conflict could spread and knock up to 0.5 percentage points off global economic growth through 2020.

The pressure on Chinese export industries that support millions of jobs adds to challenges for Communist leaders trying to shore up slowing economic growth.

Factory output, consumer spending and other indicators were weaker than expected in July. Beijing has responded by pumping money into financial markets and announcing plans for higher spending on the construction of public works.

Already, Mr. Trump has proposed another possible round of tariff hikes involving 25 percent increases on an additional $200 billion of Chinese goods. Beijing issued a $60 billion list of American products for retaliation if Washington goes ahead with that.

That smaller target list reflects the fact that Beijing is running out of American goods for retaliation due to their lopsided trade balance.

China’s imports from the United States last year totaled about $130 billion. That leaves about $20 billion for penalties after tariffs already imposed or planned on a total of $110 billion.