The Atlanta Journal-Constitution
China plans $50B of its own tariffs
Beijing targets America’s farm belt, a major area of Trump political support.
SHANGHAI — China hit back at the United States on Wednesday with proposed tariffs on $50 billion worth of U.S. soybeans, cars, chemicals and other goods, in a move likely to stoke fears that the countries’ escalating confrontation could become an allout trade war.
Moving with unusual speed, Chinese officials outlined plans to make it more costly to import 106 types of U.S. goods into China. They are intended to hit the United States square in the farm belt — a major section of President Donald Trump’s political support but also a major supplier of what China stocks in its supermarkets.
Beijing’s plan to institute new tariffs was announced just hours after the Trump administration detailed its own protections on a sim- ilar value of Chinese-made aircraft parts, cars and car parts, televisions, steel and much more. Following a previous round of tit-for-tat tariffs unveiled over the past few days, the new measures have sparked concerns that the dispute could widen further, hurting jobs and growth in both countries.
Investors drove financial markets lower over the pros- pect that the two sides were not yet done fighting.
“China has never succumbed to external pres- sure,” Zhu Guangyao, vice minister of finance, said at a news briefing Wednesday. He added, “External pres- sure will only make the Chi- nese people more focused on economic development.”
The question now is whether the two sides will intensify their efforts to punish each other before they sit down to negotiate. Neither set of tariffs goes into effect right away, though the exact timing of the Chinese measures was not clear.
The dueling tariffs still do not impact the majority of trade between the two countries, which is valued at nearly $650 billion a year. Still, economists say that the clash could escalate quickly if the two sides fail to find a way to quickly resolve their differences, threatening a commercial relation- ship that is essential to the world economy.
Letting the dispute turn into a test of wills would be a mistake, said Jie Zhao, a senior research fellow at Fudan University in Shang- hai.
“We should negotiate in a professional way,” Zhao said, “and make it less ideologi- cal and emotional.”
China’s proposed new tariffs cover a significant chunk of what it buys from the United States. The protections on the $50 billion of goods announced Wednesday, together with those on
the $3 billion worth of prod- ucts that Beijing unveiled earlier this week in retaliation for U.S. tariffs on global steel imports, account for about a third of China’s U.S. imports.
By contrast, because the United States imports signifi- cantly more from China, tariffs on the same amount of products make up roughly one-ninth of its Chinese imports. That gives the United States more room to find other Chinese products to target.
Even as Chinese officials struck a defiant tone Wednesday, they still said they wanted to avoid esca- lating the conflict.
“China’s attitude is clear,” Zhu, the vice minister of finance, said. “We don’t want a trade war because a trade war would hurt the interests of both countries.”
China could still fight back in other ways. Its control over its domestic economy and news media, and its home- grown internet, give it a strong hand in controlling public opinion and minimiz- ing the potential impact on its consumers. In the past, China has mobilized its vast ranks of consumers to turn up their noses at products from Japan, the Philippines and South Korea during polit- ical disputes, though getting Chinese consumers to stop buying iPhones and Chevrolets could be trickier.
The two sides are clashing with the future in mind. Trump instituted his latest round of tariffs against China while citing Beijing’s government-driven efforts to retool the country’s economy to focus on the technologies of the future. Known as program, the Made the in plan China speci- 2025 fies efforts to build up cut- ting-edge industries such as robotics, aerospace and electric cars.
Many companies in Europe and the United States say they fear the program will create state-supported competitors, an argument that has won backing in the Trump administration. Some companies say that Beijing finds ways to force them to hand over technology if they want to sell their wares in China, an allegation cials little the efforts China Made dispute. interest on appears that the in China Chinese negotiating in to putting show 2025 offitable. trolled A media report in Wednesday state-condescribed the development of advanced manufacturing as “an inherent requirement for the transformation and upgrading of China’s manufacturing industry, and it is also the only way for China’s economy to enter a high-quality development stage.” For now, China’s new tariffs could create a more immediate issue for the Trump administration. While they include plenty of goods Americans make, they have a heavy focus on products Americans grow: soybeans, corn, cotton, beef, frozen orange juice, even tobacco and whiskey. Many of those products come largely from Republican-dominated states, where lawmakers might be expected to have some influence with Trump and could therefore persuade him to back down from his latest trade demands. For manufactured goods, the new Chinese tariffs include cars and car parts, plastics, aerospace products and chemicals. Many of those products are also sold by European companies, giving Chinese buyers alternatives. The new tariffs announced Wednesday will amount to 25 percent on the U.S. products. Chinese officials — who blamed Trump for provoking the clash — have appe a led to the World Trade Organization, which sets trade rules and moderates disputes, to resolve the feud. But both sides risk censure by the WTO — the Trump administration for its tariffs, and China for swiftly retaliating without a proper review. “A key time has come for the United States and China to form a new consensus that includes intellectual property and the opening up of markets,” said Song Guoyou, deputy chief of the Center for American Studies at Fudan University. “Otherwise, trade may fluctuate a lot.”