China says US tariff threat runs against trend of the times

Marsha Scott
August 5, 2018

U.S. President Donald Trump has proposed raising tariffs to 25% on a range Chinese products including fresh fruit and vegetables, in the latest development of the escalating trade war.

The Commerce Ministry said the objective of the US tariffs is to restrict China's "peaceful development"-not, as the USA says, to retaliate for China's unfair trade practices with the goal of narrowing the wide trade gap between the two countries". The threatened tariffs of 10 percent could rise to 25 percent on thousands of products, including food, chemicals, steel and aluminum, furniture, tires, bicycles and beauty products.

In a statement, Lighthizer said the proposed higher tariff is meant to provide the administration with additional options to encourage Beijing to change its trade practices.

Investors fear an escalating trade war between Washington and Beijing could hit global growth.

The U.S. tariffs on $200 billion in Chinese goods - which have not yet been imposed - would be on top of 25 percent tariffs that the Trump administration already has assessed on $50 billion worth of Chinese goods.

China's Ministry of Foreign Affairs said it will fight back should the United States further increase tariffs.

The possible change in tariff rate will alter a public comment period for the proposed tariffs on $200 billion worth of goods ranging from Chinese tilapia fish to furniture and lighting products, extending a comment deadline to September 5 from a previously announced deadline of August 30, the officials said. In a survey of global fund managers in July by Bank of America Merrill Lynch, 60% of respondents said that a trade war is the biggest threat to financial markets.

China has flagged it will retaliate if Trump goes through with the even higher tariffs. After earlier action against $34 billion of USA goods, that left about $120 billion for retaliation.

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China's commerce ministry said the US tactics would have no effect on China, and would disappoint countries that are against trade wars. The trade gap narrowed in April and May as farmers front-loaded soybean exports to China before Beijing's retaliatory tariffs came into effect in early July.

The ministerial talks provided a useful occasion to inform the EU's trade partners about the results of last week's meeting between Trump and European Commission President Jean-Claude Juncker, according to a commission official.

Administration officials at the time said the tariff fight was aimed at forcing China to stop stealing American intellectual property and to abandon policies that effectively force USA companies to surrender their trade secrets in return for access to the Chinese market.

On Thursday, Chinese Foreign Ministry spokesman Geng Shuang called out on the United States in a news briefing for "blackmail".

Beijing's earlier round of tariffs appeared created to minimize the impact on the Chinese economy by targeting soybeans, whiskey and other goods available from Brazil, Australia and other suppliers.

Communications between officials of the two nations remain open, but still are just conversations about potential negotiations, senior Trump administration officials said.

"China's economy is much less dependent on trade now and on trade with the US than it used to be", says Linda Lim, a professor of corporate strategy and worldwide business at the University of MI, told Zarroli.

Other reports by MaliBehiribAe

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