China Retaliates! Beijing Threatens $50 Billion of Tariffs on US

Hannah Rogers
April 5, 2018

China was hitting back against U.S. President Donald Trump's plans to impose tariffs on $50 billion in Chinese goods with similar tariffs on U.S. goods even as Trump said the country is "not in a trade war with China".

Neither the USA nor Chinese tariffs take effect immediately.

Those measures were a response to the Trump administration's earlier tariffs on imports of steel and aluminum from China and other countries.

USTR said the China tariffs announced on Tuesday were proposed "in response to China's policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises".

China's current list comes after the Office of the U.S. Trade Representative (USTR) published Tuesday a list of 1,300 Chinese products on which it planned to impose duties over unfair trade practices.

A list the US issued Tuesday of products subject to tariff hikes included aerospace, telecoms and machinery, striking at high-tech industries seen by China's leaders as the key to its economic future.

China's Ministry of Commerce said it would levy 25% tariffs on imports of 106 US products including automobiles and aircraft.

American business groups have urged the two sides to try to resolve the issues through talks, expressing concern that threatening tariffs could lead to a dispute that hurts the United States economy.

Stocks opened sharply lower on Wall Street as an escalating trade dispute between the USA and China poses a threat to global economic growth and corporate profits.

The trade war between the USA and China has two fronts.

The current USA ambassador to China, Terry Branstad, is the former governor of Iowa, a state that could be hit hard. "I have to say that China was forced to take the countermeasure and it has reacted with restraint", Chinese Vice Commerce Minister Wang Shouwen told a press briefing.

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China said it would immediately challenge the United States move at the World Trade Organisation.

The second battle, involving USA claims of unfair Chinese actions targeting intellectual property, began on March 22 with Trump's order to trade officials to draw up a list of Chinese products to hit.

Many consumer electronics products such as cellphones made by Apple Inc and laptops made by Dell were excluded from the United States list, as were footwear and clothing, drawing a sigh of relief from retailers who had feared higher costs for American consumers.

Meanwhile, Beijing said that the economies of China and the U.S. were highly complementary and said cooperation was the only right choice between the two countries to solve the differences. Foreign companies complain that will limit or outright block their access to those industries.

U.S. chemicals, some types of aircraft and corn products are among the goods facing the taxes, the finance ministry said.

On the USA list were Chinese electric and conventional cars, flat panel TV screens, trains, robots, commercial ovens, snowblowers, lithium batteries, aerospace and engineering parts, among many high technology and value-added products. Among big technology shares, Facebook was down 1.7 percent. There has also been a surge of new activity of Chinese hackers targeting Western think tanks, USA law firms and the US maritime industry.

Soya beans are the top U.S. agricultural export to China and were among the 106 products on which China intends to impose the additional tariffs.

Many products in those segments appear on the list, including antibiotics and industrial robots and aircraft parts.

The technology investigation was launched under a little-used Cold War era law, Section 301 of the U.S. Trade Act of 1974.

In addition to advanced technologies such as communication satellites, the US list includes items ranging from various types of steel to television components, medical devices, dishwashers, snow blowers and even flamethrowers. Barriers to trade would obviously hurt US exporters.

Brazil and Argentina are the main competitors to US growers in the market for soybeans and corn. In Europe, all major markets opened lower, pointing to another expected slump when Wall Street opens.

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