China Hammers US Products With Tariffs as ‘Sparks’ Fly in Trade War
(BE2C2) — China has increased tariffs by up to 25 percent on 128 US products, including certain fruits and nuts, escalating a dispute between the world’s biggest economies in response to US duties on imports of aluminum and steel imposed by the Trump administration.
The tariffs, to take effect on Monday, were announced late on Sunday by China’s finance ministry and matched a list of potential tariffs on up to $3 billion in US goods published by China on March 23.
US President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said last month, according to Reuters.
Soon after the announcement, an editorial in the widely read Chinese tabloid Global Times warned that if the US had thought China would not retaliate or would take only symbolic counter-measures, it can now “say goodbye to that delusion.”
“Even though China and the US have not publicly said they are in a trade war, the sparks of such a war have already started to fly,” the editorial said.
The trade deficit exists because U.S. exports to China last year (2017) were only $130 billion while imports from China were $506 billion.
China’s Ministry of Commerce said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 US goods, including fruit and ethanol. The tariffs on those products will be raised by an extra 15 percent.
Eight other products, including pork and scrap aluminum, will now be subject to additional tariffs of 25 percent, it said, with the measures effective from April 2.
“The Trump administration is also considering imposing investment restrictions on Chinese companies over and above the heightened national security restrictions, but details on these were not immediately known.”
“China’s suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China’s interests,” the Chinese finance ministry said.
The retaliatory tariffs came amid escalating trade tensions between Beijing and Washington, which have rocked global financial markets in the past week as investors feared a full-blown trade dispute between two countries will be damaging for world growth.
US President Donald Trump is separately preparing to impose tariffs of more than $50 billion on Chinese goods intended to punish Beijing over US accusations that China systematically misappropriated American intellectual property — allegations Beijing denies.
The gap (trade deficit) between Chinese goods imported to the United States and American goods exported to China rose to $375.2 billion last year, up from $347 billion the prior year, data released in February by the Commerce Department showed.
China has repeatedly promised to open its economy further, but many foreign companies continue to complain of unfair treatment. China warned the US on Thursday not to open a Pandora’s box and spark a flurry of protectionist practices across the globe.
“There are some people in the West who think that China looks tough for the sake of a domestic audience, and would easily make concessions in the end,” the Global Times editorial said.
“But they are wrong.”
The overall United States trade deficit in goods and services with the world widened 12.1 percent to $566 billion last year, the largest gap since 2008, with the US trade deficit with China being the largest in the world.
The Global Times is run by the ruling Communist Party’s official People’s Daily, although its stance does not necessarily reflect Chinese government policy.
In a statement published on Monday, the Chinese commerce ministry said the US had “seriously violated” the principles of non-discrimination enshrined in WTO rules, and had also damaged China’s interests.
“China’s suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organization,” it said, adding that differences between the world’s two largest economies should be resolved through dialogue and negotiation.
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