China Retaliates With New Tariffs as Trump’s Trade War Escalates

Remigio Civitarese
Giugno 17, 2018

"The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China".

The Chinese have said they will place retaliatory tariffs on USA products but have not yet specified which ones. Among the affected $16 billion in USA goods include crude oil, natural gas, coal and some refined oil products.

"We're shooting ourselves in the foot", U.S. Rep. Erik Paulsen, R-Minn., said in a news release.

Shares in Boeing (BA) closed down 1% Friday, while Caterpillar (CAT) ended the day down 2%.

"In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China", he continued. The first wave of tariffs is scheduled for July 6, covering US$34 billion of American goods that range from beef, poultry and seafood to soybeans and cars.

The duties, which will make Chinese goods more expensive for United States customers, were imposed "in light of China's theft of intellectual property and technology and its other unfair trade practices", the White House statement said. The country's Finance Ministry has announced it will issue import tariffs on 545 product categories.

On Friday, the USA announced additional tariffs of 25 per cent on Chinese imports worth approximately United States dollars 50 billion.

Aircraft featured on the April list but were not on the revised list.

"China's government is aggressively working to undermine America's high-tech industries and our economic leadership through unfair trade practices and industrial policies like "Made in China 2025"," said US Trade Representative Ambassador Robert Lighthizer.

Nancy Johnson, executive director of the North Dakota Soybean Growers Association, cautioned that the tariffs don't go into effect until early July.

As the Trade Representative's office noted in its Section 301 investigation, the Chinese government leans on foreign companies operating in China to transfer technology in return for access to the Chinese market. More on that soon.

The reaction to the US tariffs was muted on Chinese social media, failing to break into the top 100 trending topics on the country's Twitter-like Weibo.

"China is a powerful guardian and has enough ammunition to defend existing trade rules and fairness". The country barely imported any USA lobster a decade ago.

In one of those agreements, which was conditional on Trump not threatening new tariffs, China promised to buy $70 billion worth of US agricultural and energy products - a trade-deficit reducing deal which Trump had prematurely hailed as a victory.

But Beijing's Commerce Ministry retorted: "The Chinese side doesn't want to fight a trade war, but facing the shortsightedness of the USA side, China has to fight back strongly". A further round of trade talks in Beijing earlier this month failed to yield any breakthroughs. They could then face tariffs when these chips are shipped back in to the country.

China's government urged the USA to back down from its current course of action.

IMF Director Christine Lagarde said Thursday that a trade war would lead to "losers on both sides" and could have a "serious" impact.

"A much more powerful way to stop China from moving up the value chain is to stop selling them semiconductors", Polk added.

Stock markets fell after the announcements amid fear of a trade war.

The White House said it would consult on tariffs on the other $16bn of products, and would apply these later.

That's why dozens of businessmen and businesswomen from across the country came to Washington, D.C., last month to beg the administration to abandon its ill-conceived plan to tax Chinese imports.

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