China vows to retaliate as US imposes fresh tariffs

China will impose an additional 25 per cent tariff on 659 US goods worth US$50 billion, according to the official Xinhua news agency.
A container is transferred at a port in Qingdao in China's eastern Shandong province, on June 8, 2018. The White House has announced a 25 per cent tariff on US$50 billion worth of Chinese products.
A container is transferred at a port in Qingdao in China's eastern Shandong province, on June 8, 2018. The White House has announced a 25 per cent tariff on US$50 billion worth of Chinese products.PHOTO: AFP

Trade row deepens as US announces 25% tariff on $67b worth of Chinese goods

The trade row between China and the United States deepened yesterday as the White House announced a 25 per cent tariff on US$50 billion (S$67 billion) worth of Chinese products, taking effect on July 6.

China vowed retaliation, saying the tariffs would harm both countries and the world trade order.

"China is unwilling to have a trade war, but the Chinese side has no choice but to strongly oppose this, due to the United States' myopic behaviour that will harm both parties," China's Commerce Ministry said on its website.

"We will immediately introduce tariff measures of the same scale and strength. All the results from the negotiations previously reached... will be invalid."

In its statement, the White House said: "In light of China's theft of intellectual property and technology and its other unfair trade practices, the United States will implement a 25 per cent tariff on US$50 billion of goods from China that contain industrially significant technologies."

President Donald Trump, in an impromptu interview on the driveway at the White House, mentioned China's President Xi Jinping, telling Fox News: "He's my friend, President Xi, he's a great man, he's a wonderful guy but at some point, we have to straighten it out.

"We have... great brain power in Silicon Valley, and China and others steal those secrets. We're going to protect those secrets, those are crown jewels of this country."

US Trade Representative Robert Lighthizer said in a statement: "China's government is aggressively working to undermine America's high-tech industries and our economic leadership.

"Technology and innovation are America's greatest economic assets and President Trump rightfully recognises that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness."

The US has in recent weeks also slapped tariffs on products from other countries, including its allies.

German Chancellor Angela Mer-kel warned yesterday that Europe's strategic interests rode on the future of its car industry, and hinted at probes of US Internet giants on grounds of unfair competition.

The list of Chinese goods targeted by the new tariffs covers 1,102 categories valued at approximately US$50 billion in 2018 trade value, US officials. They mentioned aerospace, information and communications technology, robotics and industrial machinery. The detailed list contains a range of petroleum-based products, plastic and steel pipes and tubes and fittings, and certain rubber products. The list does not include goods such as mobile phones or TVs.

Chinese economist Hu Xingdou said the US move offends China, which in future may refuse to cooperate on issues such as North Korea, Iran and Syria, adding: "It is not good news for either side."

Mr Hugo Erken, senior economist and country analyst for North America, Mexico and India at Rabo-bank, told The Straits Times this was a "watershed moment".

"We may be coming closer to the point that it becomes difficult for either side to back down. The current trade spat could result in a situation similar to the Smoot-Hawley Act, which probably exacerbated the Great Depression of the 1930s."

 
A version of this article appeared in the print edition of The Straits Times on June 16, 2018, with the headline 'China vows to retaliate as US imposes fresh tariffs'. Print Edition | Subscribe