Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back
today Jun 18, 2018
U.S. President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion (£37.6 billion) of Chinese imports on Friday, and the smouldering trade war between the world’s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.
Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars, the latest hardline stance on trade by a U.S. president who has already been wrangling with allies.
China’s Commerce Ministry said it would respond with tariffs “of the same scale and strength” and that any previous trade deals with Trump were “invalid.”
The official Xinhua news agency said China would impose 25 percent tariffs on 659 U.S. products, ranging from soybeans and autos to seafood.
China’s retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.
Shares of Boeing Co, the single largest U.S. exporter to China, closed down 1.3 percent after paring earlier losses. Caterpillar Inc, another big exporter to China, ended 2 percent lower.
Trump said in a statement that the United States would pursue additional tariffs if China retaliates.
Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of negotiations failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.
“These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” Trump said.
Analysts, however, did not expect the U.S. tariffs to inflict a major wound to China’s economy and said the trade dispute likely would continue to fester.
U.S. Customs and Border Protection will begin collecting tariffs on 818 product categories valued at $34 billion on July 6, the U.S. Trade Representative’s office said.
The list was slimmed down from a version unveiled in April, dropping Chinese flat-panel television sets, medical breathing devices and oxygen generators and air conditioning parts.
And USTR added tariffs on another 284 product lines, valued at $16 billion, targeting semiconductors, a broad range of electronics and plastics that it said benefited from China’s industrial subsidy programs, including the “Made in China 2025” plan, aimed at making China more competitive in key technologies such as robotics and semiconductors.
Tariffs on these products will go into effect after a public comment period. A senior Trump administration official told reporters that companies will be able to apply for exclusions for Chinese imports they cannot source elsewhere.
While many business groups and lawmakers urged the two governments to negotiate instead, there was little sign talks would resume soon.
Trump’s tariffs did gain some support from an unlikely source, U.S. Senate Democratic leader Charles Schumer, who called them “right on target.”
“China is our real trade enemy, and their theft of intellectual property and their refusal to let our companies compete fairly threatens millions of future American jobs,” Schumer said in a statement.
The USTR official said the tariffs were aimed at changing China’s behaviour on its technology transfer policies and massive subsidies to develop high-tech industries. The United States now dominates those industries, but Chinese government support could make it difficult for U.S. companies to compete.
Washington has completed a second list of possible tariffs on another $100 billion in Chinese goods, in the expectation that China will respond to the initial U.S. tariff list in kind, sources told Reuters.
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