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Tuesday, September 18, 2018 16.35PM / PBS
China has announced a levy on $60bn of US goods, hours after Donald Trump imposed new tariffs on $200bn of Chinese products (See notes from The Guardian)
China on Tuesday announced a tariff hike
on $60 billion of U.S. products in response to President Donald Trump’s latest
duty increase in a dispute over Beijing’s technology policy.
The announcement followed a warning by an
American business group that a “downward spiral” in their conflict appeared
certain following Trump’s
penalties on $200 billion of Chinese goods.
The Finance Ministry said it was going
ahead with plans announced in August for the increases of 10 percent and 5
percent on 5,207 types of U.S. goods. A list released last month included
coffee, honey and industrial chemicals.
The increase is aimed at curbing “trade
friction” and the “unilateralism and protectionism of the United States,” the
ministry said on its website. It appealed for “pragmatic dialogue” to “jointly
safeguard the principle of free trade and the multilateral trading system.”
The Trump administration announced the
tariffs on some 5,000 Chinese-made goods will start at 10 percent, beginning
Monday. They are to rise to 25 percent on Jan. 1.
A Commerce Ministry statement earlier
said Trump’s increase “brings new uncertainty to the consultations” but there
was no word on whether Beijing would back out of talks proposed last week by
Washington.
The
United States complains Chinese industry development plans including “Made in
China 2025,” which calls for creating global champions in robotics and other
fields, are based on stolen technology, violate Beijing’s market-opening
commitments and might erode American industrial leadership.
American
companies and trading partners including the European Union and Japan have
longstanding complaints about Chinese market barriers and industrial policy.
But they object to Trump’s tactics and warn the dispute could chill global
economic growth and undermine international trade regulation.
The
American Chamber of Commerce in China warned Washington is underestimating
Beijing’s determination to fight back.
“The
downward spiral that we have previously warned about now seems certain to
materialize,” the chamber chairman, William Zarit, said in a statement.
Trump
imposed 25 percent duties on $50 billion of Chinese products in July. Beijing
retaliated with similar penalties on the same amount of American goods.
The
U.S. duties targeted Chinese goods Washington says have benefited from improper
industrial policies. Beijing’s penalties hit soybeans and other farm goods from
states that voted for Trump in 2016.
Trump
threatened Monday to add a further $267 billion in Chinese imports to the
target list if China retaliates for the latest U.S. duties. That would raise
the total affected by U.S. penalties to $517 billion — covering nearly
everything China sells the United States.
“Contrary
to views in Washington, China can — and will — dig its heels in and we are not
optimistic about the prospect for a resolution in the short term,” said Zarit
of the American Chamber of Commerce. “No one will emerge victorious from this
counter-productive cycle.”
The
chamber appealed to both governments for “results-oriented negotiations.”
As
Beijing runs out of U.S. goods for retaliation, American companies say
regulators are starting to disrupt their operations.
Last
week, the American Chambers of Commerce in China and in Shanghai reported 52
percent of more than 430 companies that responded to a survey said they have
faced slower customs clearance and increased inspections and bureaucratic
procedures.
The
U.S. government withdrew some items from its preliminary list of $200 billion
in Chinese imports to be taxed, including child-safety products such as bicycle
helmets. And in a victory for Apple Inc., the administration removed smart
watches and some other consumer electronics products.
“China
has had many opportunities to fully address our concerns,” Trump said in a
statement. “I urge China’s leaders to take swift action to end their country’s
unfair trade practices.”
Trump
has also complained about America’s gaping trade deficit — $336 billion last
year — with China, its biggest trading partner.
In
May, in fact, it looked briefly as if Treasury Secretary Steven Mnuchin and
Chinese Vice Premier Liu He had brokered a truce built around a Chinese offer
to buy enough American farm products and liquefied natural gas to put a dent in
the trade deficit. But Trump quickly backed away from the truce.
In
the first two rounds of tariffs, the Trump administration took care to try to
spare American consumers from the direct impact of the import taxes. The
tariffs focused on industrial products, not on things Americans buy at the mall
or via Amazon.
By
expanding the list to $200 billion of Chinese products, Trump may spread the
pain to ordinary households. The administration is targeting a bewildering
variety of goods — from sockeye salmon to baseball gloves to bamboo mats —
forcing U.S. companies to scramble for suppliers outside China, absorb the
import taxes or pass along the cost to their customers.
Sohn
said the Trump administration is pursuing a legitimate goal of getting China to
stop violating international trade rules but that it should have enlisted
support from other trading partners, such as the European Union, Canada and
Mexico, and presented Beijing with a united front.
Trump
has strained relations with potential allies including the European Union,
Canada and Mexico by raising tariffs on imported steel and aluminum. He
demanded Canada and Mexico renegotiate the North American Free Trade Agreement
to make it more favorable to the United States.
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