China Plans Tariffs on $60 Billion of Imports to Counter Trump

George McgeeAug 04, 2018

Beijing has announced plans to slap import taxes targeting 5,207 American products worth $60 billion in retaliation to trade tariffs on Chinese goods imposed by the US.

On Wednesday, President Donald Trump ordered U.S. Trade Representative Robert Lighthizer to consider raising proposed tariffs on an additional $200 billion of Chinese products from 10% to 25%. China vowed to retaliate while also urging Washington to act rationally and return to talks to resolve the dispute.

Tariffs on another $16bn worth of products are pending, the second part of tariffs on $50bn worth of imports that the U.S. announced in March.

Days later, Washington unveiled a list of another US$200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10 per cent import duties.

China on Friday threatened to impose tariffs on $60 billion worth of United States goods. Last year, China imported about $130 billion of USA goods. China says if that happens, it will follow through with its taxes, which will range from 5% to 25%.

The Chinese Commerce Ministry on Friday listed 5-thousand-207 USA import products with proposed duties of 5 to 25-percent.

"The US side has repeatedly escalated the situation against the interests of both enterprises and consumers", the Chinese Commerce Ministry said in its statement. "China has to take necessary counter-measures to defend the country's dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries in the world".

White House officials had hoped Trump's latest threat would frighten Chinese officials into negotiations, where Trump aims to secure more favorable terms for USA manufacturers in one of the world's largest marketplaces.

"The Chinese had better not underestimate the determination of President Trump to follow through and seek zero tariffs and non-tariff barriers, and subsidies and a level playing field and major reforms in IP theft and forced transfer of technologies", Kudlow warned, referring to intellectual property. "He is going to stand tough".

Chinese leaders have offered to narrow their politically sensitive trade surplus with the United States by purchasing more American goods. China's trading partners complain those might violate its market-opening pledges by subsidizing or shielding Chinese companies from competition.

The US, the world's largest economy, has a trade deficit of nearly Dollars 500 billion with China, the world's second largest economy.

The trade war between the two superpowers has escalated in recent months after Donald Trump's administration imposed tariffs on $34bn of Chinese goods in July.

In an editorial on Wednesday, the state-run China Daily called the US' move "gangsterism", and said it showed the USA had no qualms about squeezing as much as it could from trade partners. "My team and I will continue our work with the Trump Administration to ensure that Chinese and USA officials strike a fair compromise so that Alaska's natural gas reaches the market".

"We are coming together with the European Union to make a deal with them, so we'll have a united front against China and, I think, most of our trade team would tell you, we're moving close on Mexico", he said.

The Ministry threat came after Mr. Wang met with U.S. Secretary of State Mike Pompeo at a meeting of the Association of Southeast Asian Nations (ASEAN) in Singapore on Friday.

The dynamic has proved hard to change, given US consumers' reliance on Chinese goods. As I said on the floor, is it structural changes or is it increased exports? The list of products includes a variety of agricultural goods such as beef, as well as small planes, chemical components, textiles and liquefied natural gas.

Today's threat targeting a smaller amount of USA goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.

Tsinghua University economist Yuan Gangming said the measures China had taken were reasonable. "This would be a tremendous missed opportunity and would have very real effects on the U.S. LNG industry", he said.

Other U.S. goods targeted by China in the latest list include semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, iron ore, steel products, roasted coffee, sugar, foods containing chocolate, candies, and even auto windscreens.

"Foreign investors don't want to be in China".

China's biggest USA imports by value in 2017 were aircraft and related equipment, soybeans and autos.

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