Published: Thu, April 05, 2018
World Media | By Shelia Harmon

China strikes back with tariffs targeting $50B in U.S. goods

China strikes back with tariffs targeting $50B in U.S. goods

Earlier, China, the second largest trade partner of the USA, had announced levies on 128 American products after Washington had announced import duties on Chinese steel and aluminum last month.

Beijing was reacting to a US announcement Tuesday of a list of Chinese goods targeted for a tariff hike previously approved by Trump.

After the United States unveiled plans to impose tariffs on $50 billion in Chinese imports Tuesday, China lashed back within hours, matching the American tariffs with plans to tax $50 billion of us products, including soybeans and small aircraft. The suggested tariffs wouldn't take effect right away: A public comment period will last until May 11, and a hearing on the tariffs is set for May 15.

China said it would immediately challenge the USA move at the World Trade Organisation. "If someone wants to talk, our door is open", said Wang Shouwen, vice-minister of commerce.

The Trump administration's threats against China, including the two probes, don't lead to tangible action over the rest of 2017 as Trump shows restraint amid a budding relationship with his Chinese counterpart Xi Jinping.

Foreign companies are increasingly alarmed by initiatives such as Beijing's long-range industry development plan, dubbed "Made in China 2025", which calls for creating global leaders in electric cars, robots and other fields.

"We must address China's theft of technology and intellectual property belonging to American companies".

Trump is demanding China to cut down United States dollars 375 billion trade deficit by USD 100 billion in about a month. In an interview with CNBC Wednesday morning, Ross said that tariffs imposed by China amount to 0.3 percent of U.S. GDP and that some action on tariffs has been "coming for a while". Supporters and opponents began weighing in as soon as the list was released. China strongly condemns and firmly opposes such a move which is typical of unilateralism and trade protectionism.

"It serves neither China's interest, nor USA interest, even less the interest of the global economy", it continued, adding, "As the Chinese saying goes, it is only polite to reciprocate". "The Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against U.S. products in accordance with Chinese law".

"Even though the numbers between China and the USA are comparable, it seems clear that China is trying to twist the knife", he said, "This is a warning that 'we are willing to fight harder and inflict more pain that you are'".

As it stands, China is more vulnerable than the USA, says Katsoras. But some critics say that Americans will end up being hurt. A list circulated by the European Union targeted USA products like Kentucky bourbon and North Carolina tobacco, leading to strong condemnations of Trump's efforts from members of his own party. But that did little to mollify critics.

Items on the Chinese list include agricultural exports such as soybeans, and vehicles including some airplanes and trucks.

The economies of China and the United States are highly complementary, and "cooperation is the only right choice for the two countries", the MOC said. "People from American industries may exert pressure on the USA government and influence final policy implementation".

"The US proposal on tariffs aims to hit China's industrial ambitions without hurting US consumers", said Tom Orlik, chief Asia economist at Bloomberg Economics in Beijing. "Otherwise, nothing will change and American jobs will continue to suffer at the hands of Beijing's practices".

"We understand some big-picture concern but it appears to us that the specific proposals from China this morning are calibrated carefully to avoid a major impact on Boeing and are therefore intended more as a message to the USA administration that additional trade barriers will be met with an escalating response", said JPMorgan analyst Seth Seifman.

Greg Colman of National Bank Financial said the tariffs against US goods could increase demand for agriculture from other countries.

American businesses have long complained about being forced to partner with Chinese firms and share their technology as a price of doing business in the fast-growing Chinese market. But similar promises in the past have gone unmet.

The move by China is the latest in ongoing tit-for-tat measures between the countries.

Washington granted EU, South Korea and some other exporters, but not ally Japan, exemptions to the steel and aluminum tariffs on March 22. This could be accomplished by reducing Chinese exports to the US, by raising the number of USA goods China imports, or a combination of both.

The comments came a day after Beijing imposed tariffs on 128 American products as a retaliation against United States duties on steel and aluminium.

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