China Retaliates With New Tariffs as Trump’s Trade War Escalates
Jun 17 2018 by Cristina Jennings
Beijing earlier drew up a list of $50 billion in U.S. products that would face retaliatory tariffs, including beef and soybeans, a shot at Trump's supporters in rural America.
Today, China matched that amount, announcing it would impose tariffs on $US34b worth of U.S. imports from July 6, with $US16b more to follow at an unspecified time.
China said it would retaliate with $US50 billion in tariffs in response, rattling financial markets. Trump has already said the United States would hit another $100 billion of Chinese imports if Beijing retaliated. "China has, for example, always been engaging in several unfair practices related to the acquisition of American intellectual property and technology". And that's what has our trading partners so unnerved.
China's trade surplus with the USA past year was about $375 billion.
The plans have elicited a mixed political reaction, drawing praise from Democrats and opposition from Republicans, who typically favour free trade policies.
The 25% tariffissued by the Chinese government includes everything from agricultural products, soybeans, corn, and wheat to beef, pork, poultry, and automobiles.
Shares of Boeing Co, the single largest USA exporter to China, closed down 1.3 percent after paring earlier losses.
China is also a major importer of other products such as propane, and tariffs would boost prices for that and several other petroleum products, said Bernadette Johnson, vice president at Drillinginfo in Denver. The White House has said these tariffs will come into effect soon, although no date has been announced.
That mirrored the Trump administration's announcement Friday of a tariff hike on $34 billion of Chinese goods, also due to take effect July 6, and plans to consider widening it to an additional $16 billion of other products.
Farmers are also anxious about harm caused by retaliation.
Earlier, in mid-May, the USA and China had announced a cease-fire after two rounds of trade negotiations. "I have a wonderful relationship with President Xi [Jinping]".
However many economists and businesses in the USA say the tariffs are likely to hurt some of the sectors the administration is trying to protect, which depend on China for parts or assembly. The 25 percent tariffs will be placed on roughly $50 billion in imports from China.
Washington rescinded a ban on sales of USA technology to ZTE after the company agreed to pay a $1 billion fine and hire American-picked compliance managers. "But it's different when you're dealing with other governments".
"The mentality of the Trump team is a little odd", said Andrew Polk, co-founder of research firm Trivium China in Beijing.
"That's what has gotten us to the situation today where the Chinese are actually at the table", Bannon said.
The revisions removed 515 items from an initial list published in early April following a public comment period, bringing the list to 818 product lines. In Beijing, the State Council's Customs Tariff Commission said on Friday it will impose a 25 percent tariff on 659 categories of USA goods valued at $50 billion. Consumer goods including mobile phones and televisions aren't being hit with the tariffs. The tariffs will cover more than 1,000 types of items, but many of those are very similar manufacturing components.
Businesspeople and economists say Chinese leaders are less likely to compromise on technology. Friday's actions are only aimed at China. "Those are crown jewels for this country", the president said.
Unconfirmed rumours hold that the president will target China's United States tech sector, where network hardware maker Huawei has already been blocked from deals for alleged security concerns.