CHINA has retaliated against the Trump administration’s aggressive bid to cut Chinese imports by raising tariffs on $50 billion (£27bn) of US goods including aircraft, cars and soybeans as the technology dispute between the two countries worsens.
Beijing’s commerce ministry criticised the US move to impose 25 per cent tariffs on $50bn worth of Chinese imports, describing it as a violation of global trade rules.
It said China was acting to protect its “legitimate rights and interests” and announced that a 25 per cent tariff would be imposed. The date on which the charges will take effect will be announced later.
The dispute stemmed from US complaints that Beijing pressures foreign companies to hand over technology in return for market access.
Companies and investors worry that the conflict could dampen worldwide commerce and set back the global economic recovery.
The Office of the US Trade Representative issued a list targeting 1300 Chinese products, including industrial robots and telecommunications equipment, but said the tariffs would not take effect immediately.
A public comment period will last until May 11, and a hearing on the tariffs will be held on May 15.
Companies and consumers will have the opportunity to lobby to have some products taken off the list or have others added.
The latest US move heightened trade tensions with China, which on Monday had slapped taxes on $3bn (£2.1bn) of US products in response to earlier US tariffs on steel and aluminium imports.
However, Philip Levy, a senior fellow at the Chicago Council on Global Affairs and an economic adviser to President George W Bush, warned: “China’s going to be compelled to lash back.”
The US administration said it had sought to draw up the list of targeted Chinese goods in a way that might limit the impact of the tariffs – a tax on imports – on American consumers, while hitting Chinese imports that benefit from Beijing’s sharp-elbowed tech policies.
But some critics say that Americans will end up being hurt.
“If you’re hitting $50bn in trade, you’re inevitably going to hurt somebody, and somebody is going to complain,” said Rod Hunter, a former economic official at the National Security Council.
Even representatives of American business, which have complained for years that China has pilfered US technology and discriminated against US companies, were critical of the administration’s latest action. John Frisbie, president of the US-China Business Council, said: “Unilateral tariffs may do more harm than good and do little to address the problems in China’s (intellectual property) and tech transfer policies.”
Some technology groups contending directly with Chinese competition expressed their misgivings. “The Trump administration is right to push back against China’s abuse of economic and trade policy,” said Robert Atkinson, president of the Information Technology and Innovation Foundation think tank, “But imposing tariffs on producer goods will inadvertently hurt Americans through reduced capital investment and lower productivity growth.”
Chinese officials have acknowledged that their country has more to lose in a full-blown conflict with Washington but have said they will endure the cost.
Deputy finance minister, Zhu Guangyao, appealed to the US to “work in a constructive manner” and avoid hurting both countries.
Beijing could harm US firms in China by withholding licences while some economists say the US could target state-owned enterprises (SOEs) that dominate energy, telecoms and banking industries.
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