China threatens new tariffs on US$60b worth of US goods

People heading out to pick strawberries in California. The new tariffs threatened by China cover 5,207 goods imported from the United States.
People heading out to pick strawberries in California. The new tariffs threatened by China cover 5,207 goods imported from the United States.PHOTO: AGENCE FRANCE-PRESSE
VIDEO: REUTERS

Beijing has threatened to levy additional tariffs of between 5 per cent and 25 per cent on US$60 billion (S$82 billion) worth of US goods, a signal that it is not backing down in the trade war with the United States.

The latest move comes two days after US President Donald Trump's threat to impose a higher 25 per cent tariff on US$200 billion worth of Chinese imports.

China's Finance Ministry unveiled the new tariffs on 5,207 goods imported from the US in a statement on its website yesterday evening. These goods range from liquefied natural gas (LNG) to aircraft and semiconductors.

In a separate statement, the Commerce Ministry also said Beijing reserved the right to "introduce other countermeasures", while calling its latest move rational and restrained.

"The US side has repeatedly escalated the situation against the interests of both enterprises and consumers, and China has to take necessary countermeasures to defend its dignity and the interests of its people," the Commerce Ministry said in its statement.

It also said that the date of implementation of the taxes will depend on actions taken by the US, while adding that consultation on the basis of mutual respect, equality and mutual benefit is an effective way to resolve trade differences.

Yesterday's threat comes just a day after Beijing called for dialogue based on mutual respect. Foreign Minister Wang Yi also urged the US to remain "cool-headed" at a press conference in Singapore after an Asean-China meeting.

"Any unilateral threat or blackmail will only lead to intensi-fication of conflicts and damage to the interests of all parties," said the statement.

White House economic adviser Larry Kudlow said China's threat was a "weak response", and warned that "they better not underestimate the (US) President".

"China is in trouble right now - their economy is lousy, investors are walking out, the currency is falling," he added.

Beijing's threat comes just a day after it called for dialogue based on mutual respect. Foreign Minister Wang Yi also urged the US to remain "cool-headed" at a press conference in Singapore after an Asean-China meeting.

Last month, the US and China imposed tariffs on US$34 billion of each other's imports, with Washington expected to levy more tariffs on another US$16 billion of Chinese goods in the coming weeks, a move that China has said it will match.

In the same month, the US also unveiled a list of US$200 billion worth of Chinese goods that it intends to hit with 10 per cent import duties.

But Mr Trump ratcheted up the pressure this week by asking US Trade Representative Robert Lighthizer to consider increasing the proposed tariffs to 25 per cent in a bid to force Beijing back to the negotiating table amid stalled talks.

The US wants China to make fundamental changes to what it calls "harmful policies" on intellectual property protection, technology transfers and subsidies for its high-tech industries.

 
 

In an editorial on Wednesday, the state-run China Daily called the US' move "gangsterism", and said it showed the US had no qualms about squeezing as much as it could from trade partners.

Tsinghua University economist Yuan Gangming said the measures China had taken were reasonable. He noted that while previous Chinese responses to threats of US tariffs had been swift, it waited two days before responding this time.

Beijing was also not striking back with the "same strength", said Professor Yuan. This showed that China was trying to find ways to avoid escalating the trade war, and leave room for negotiation.

 
A version of this article appeared in the print edition of The Straits Times on August 04, 2018, with the headline 'China threatens new tariffs on US$60b worth of US goods'. Print Edition | Subscribe