Published: Mon, June 18, 2018
People | By Leon Thompson

Trump planning 25% tariffs on up to $50 billion of Chinese goods

Trump planning 25% tariffs on up to $50 billion of Chinese goods

The announcement was sure to spark countermeasures by Beijing, which yesterday vowed to strike back quickly if the USA hurts its interests, bringing the world's two largest economies to the brink of an all-out trade war long feared by markets and industry.

Ten days later, the White House abruptly said it would proceed with the tariffs. "You get consumers who are worse off".

Chinese media have mocked US President Donald Trump over plans to impose 25% tariffs on $50bn worth of Chinese goods, saying "wise men build bridges but fools build walls".

China, in return, said it would impose an additional 25 percent tariff on certain US products worth $50 billion.

Beijing has left the door open to negotiations, even as it matched Washington with tariffs and bellicose rhetoric.

The U.S. exports about $14 billion worth of soybeans to China, according to the U.S. Department of Agriculture, and Iowa is the nation's second-largest soybean grower, per the Register. Meanwhile, the other 16 billion dollars worth of Chinese products will undergo further review in a public notice and comment process.

American auto giant Ford has sold 338,386 cars thus far in China in 2018, about one-third the number in the United States, and had welcomed a Chinese plan to lower tariffs on auto imports.

"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", the Chinese Commerce Ministry said in a statement.

Trade retaliation from China has so far been mainly confined to the farm sector, a small part of the overall USA economy.

"The only question is how much do you want to pay", said Brandon Fried, executive director of the Airforwarders Association, "and which is better - paying that or paying the increased tariff?" So they drive up the price of targeted imports.

Friday's action follows an administration report in March that complained China had forced foreign companies to surrender their technology secrets in return for market access and had pilfered other advanced USA technologies through a campaign of cyber-theft and investment in Silicon Valley startups. Televisions and pharmaceuticals were removed from the original tariff list.

These tariffs will impose higher costs on US companies that use the equipment. The impact won't be as visible as it would be if consumer products were taxed directly.

China followed suit by imposing counter tariffs amounting the same.

Boeing earned about 12.8 per cent of its 2017 revenues from China and is seen as among the U.S. multinationals more vulnerable to a full-on trade war. Among these are outright cyber-theft. In another move that would heighten tensions, the Treasury Department is expected to announce by June 30 restrictions on Chinese companies investing in the U.S.

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The still showing interest in talks with Beijing.

Vegetables took up 14.6 percent of China's imports from the 2016, while fuel was 2.3 percent, and transportation products - mostly airplanes - accounted for 9.6 percent, according to the World Bank.

They point to plans stretching back two decades that call for state-led development of Chinese competitors in artificial intelligence, clean energy, electric cars, robotics, biotech and other fields.

Agricultural trader Cargill, the largest United States private company, called for dialogue between Beijing and Washington so businesses, farmers and consumers would not be caught up in an all-out trade war.

Yes. And for a time last month it looked as if they'd reached a truce.

Bloomberg Economics estimates a trade war would have a limited direct effect on growth in both countries. But critics dismissed that agreement as vague.

Trump has made a number of tariff-related threats.

The Chinese Commerce Ministry also says it will impose duties of "the same scale and intensity" in response to the Trump administration's move to slap tariffs on $50 billion of Chinese goods. He has already threatened to put tariffs on an additional $100 billion of Chinese goods.

Beijing also has announced plans to cut import duties on autos and some consumer goods and to ease limits on foreign ownership in auto manufacturing, insurance and some other industries, though those don't directly address USA complaints.

Mr Trump has cited national security as a reason to threaten punitive tariffs on German cars.

"If the United States takes unilateral, protectionist measures, harming China's interests, we will quickly react and take necessary steps to resolutely protect our fair, legitimate rights", Chinese Foreign Ministry spokesman Geng Shuang told a regular daily news briefing.

Meanwhile, Chinese companies use government money to buy US businesses.

China is adept at playing countries and companies off against one another, Jennifer Hillman, a Georgetown University law professor, testified last week before the U.S.

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