China hits back against latest US tariffs

PHOTO: REUTERS

25% additional tariffs on US$16 billion worth of US goods from Aug 23 as trade war heats up

BEIJING/WASHINGTON • China has said it will impose 25 per cent additional tariffs on US$16 billion (S$21.8 billion) worth of imports from the US from Aug 23, matching an earlier move from Washington in another ratchet higher for the trade war between the two nations.

The US decision to levy 25 per cent tariffs on the same value of Chinese goods is "very unreasonable" and China will have to retaliate to protect its rightful interests and the multilateral trading system, China's Ministry of Commerce said in a statement yesterday. The Chinese list covers coal, oil, chemicals and some medical equipment.

The tit-for-tat tariffs are poised to surge even higher, with the US reviewing 10 per cent duties on a further US$200 billion in Chinese imports that it may even raise to 25 per cent after a comment period ends on Sept 6.

Should the US proceed with those tariffs, China is ready to slap duties on an additional US$60 billion of American goods.

The situation is "not yet past the point of no return, but edging closer," said Ms Wang Tao, head of China economic research at UBS AG in Hong Kong, in a note before the latest announcement.

"The risk is if the US administration's gamble to strong-arm China into giving in to all US demands without some US compromise only leads to successive rounds of higher and higher US tariff impositions."

US President Donald Trump has suggested he may tax effectively all imports of Chinese goods, which reached more than US$500 billion last year.

 
 

The US Trade Representative's (USTR) office said on Tuesday the country will start collecting 25 per cent tariffs on US$16 billion of Chinese goods on Aug 23, as it published a final tariff list targeting 279 imported product lines.

The action is the latest by Mr Trump to put pressure on China to negotiate trade concessions after imposing tariffs on US$34 billion of goods on July 6.

Beijing reported a US$28.1 billion trade surplus with the US for July, down from the record US$28.9 billion seen in June.

The latest US$16 billion list announced by the US will hit semiconductors from China, even though many of the basic chips in these products originate from the US, Taiwan or South Korea.

The US Semiconductor Industry Association said the US tariffs on semiconductors imported from China will hurt America's chipmakers, not China's.

The 25 per cent tariffs also will apply to a broad range of Chinese electronics, plastics, chemicals and railway equipment that the office of the USTR has said benefit from the "Made in China 2025" industrial plan, aimed at making China competitive in high-technology industries.

Slamming the latest US sanctions, major Chinese state newspapers yesterday published a lengthy commentary by the official Xinhua news agency on their front pages yesterday, saying certain people who want to wield the "stick of hegemony" on China with tariffs for their own personal ends will only end up hurting themselves.

Entitled "declaration", the latest commentary said China could get through the storm but did not directly mention the US President.

"Certain people go against the tide for their own private ends and go against morality; the barrier of tariffs wantonly rise, and the stick of hegemony is raised all around," the commentary said.

"Although this may for a moment bring preening with delight, it will make it hard to resolve economic imbalances or out of kilter politics and other deep-rooted problems," it said.

BLOOMBERG, REUTERS, AGENCE FRANCE-PRESSE

 
A version of this article appeared in the print edition of The Straits Times on August 09, 2018, with the headline 'China hits back against latest US tariffs'. Print Edition | Subscribe