By JOE McDONALD, AP Business Writer
BEIJING (AP) — China on Wednesday issued a $50 billion list of U.S. goods, including soybeans and small aircraft, for possible tariff hikes in an escalating technology dispute with Washington.
The country’s tax agency gave no date for the 25 percent increase to take effect and said it will depend on what President Donald Trump does about the U.S. plans to raise duties on a similar amount of Chinese goods.
Beijing’s list of 106 products included the biggest U.S. exports to China, reflecting its intense sensitivity to the dispute over American complaints that it pressures foreign companies to hand over technology.
The clash reflects the tension between President Trump’s promises to narrow a U.S. trade deficit with China that stood at $375.2 billion in goods last year and the ruling Communist Party’s development ambitions. Regulators use access to China’s vast market as leverage to press foreign automakers and other companies to help create or improve industries and technology.
President Donald Trump says the U.S. lost a trade war with China “years ago.”
In a tweet Wednesday after China’s announcement, Trump said: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.”
A list the U.S. issued Tuesday of products subject to tariff hikes included aerospace, telecoms, and machinery, striking at high-tech industries seen by China’s leaders as the key to its economic future.
China said it would immediately challenge the U.S. move in the World Trade Organization.
“It must be said, we have been forced into taking this action,” a deputy commerce minister, Wang Shouwen, said at a news conference. “Our action is restrained.”
A deputy finance minister, Zhu Guangyao, appealed to Washington to “work in a constructive manner” and avoid hurting both countries.
Zhu warned against expecting Beijing to back down.
“Pressure from the outside will only urge and encourage the Chinese people to work even harder,” said Zhu at the news conference.
Companies and economists have expressed concern that improved global economic activity might sputter if other governments are prompted to raise their own import barriers.
But Commerce Secretary Wilbur Ross is brushing off concern over a trade war with China. In an interview with CNBC Wednesday morning, Ross said that tariffs imposed by China amount to 0.3 percent of U.S. GDP and that some action on tariffs has been “coming for a while.”
“What we’re talking about on both sides is a fraction of 1 percent of both economies,” he said.
The larger concern, Ross said, is the protection of U.S. intellectual property.
Still, U.S. stock futures slumped over concerns that the back-and-forth tariff actions will stunt trade and growth. Ross said he would not comment on the stock market’s reaction, but then said he thinks “it’s being out of proportion.”
China announced tariffs worth $50 billion on a series of U.S. products including soybeans, whiskey, and cars.
Chinese officials said they were obliged to act after the U.S. announced plans for retaliatory tariffs in an escalating dispute over China’s technology program and other trade issues.
The dispute “may compel countries to pick sides,” said Weiliang Chang of Mizuho Bank in a report.
“U.S. companies at this point would like to see robust communication between the US government and the Chinese government and serious negotiation on both sides, hopefully to avoid a trade war,” said the chairman of the American Chamber of Commerce in China, William Zarit.
“I can only hope that we solve our differences as soon as possible to avoid damage to the U.S. economy, Chinese economy and to U.S. companies.”
Previously, Trump approved higher import duties on Chinese-made washing machines and solar modules to offset what Washington said were improper subsidies.
tED magazine note: On Tuesday, April 3, The United States Trade Representative released the list of hundreds of items from China that will be impacted by the tariff. While steel and aluminum are on the list, there are a number of items, including machinery parts and LED lighting, on the list that could have an impact on our supply chain. You can read the notes from the U.S. Trade Representative and the list of items impacted by the tariff here.
AP Writers Gillian Wong and Christopher Bodeen and AP researchers Shanshan Wang and Yu Bing contributed.
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Tagged with Biggest News, China, manufacturing, tariffs, trade