News ID: 216754
Published: 0142 GMT June 16, 2018

Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back

Trump sets tariffs on $50 billion in Chinese goods; Beijing strikes back
EPA

US President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, and the smoldering 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 US president who has already been wrangling with allies, Reuters reported on Saturday.

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 US 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.

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 US complaints over Chinese industrial policies, lack of market access in China and a $375 billion US 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 US tariffs to inflict a major wound to China's economy and said the trade dispute likely would continue to fester.

US Customs and Border Protection will begin collecting tariffs on 818 product categories valued at $34 billion on July 6, the US Trade Representative's office said.

The tariffs will still target autos, including those imported by General Motors Co and Volvo, owned by China's Geely Automobile Holdings, and electric cars.

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.

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 US tariff list in kind, sources said.

Beijing and Washington had held three rounds of high-level talks since early May but failed to reach a compromise. Trump was unmoved by a Chinese offer to buy an additional $70 billion worth of US farm and energy products and other goods, according to people familiar with the matter.

Trump has also triggered a trade fight with Canada, Mexico and the European Union over steel and aluminum and has threatened to impose duties on European cars.

 

 

   
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