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US escalates China trade showdown with $50 billion tariff plan

© Mandel Ngan / AFP | US President Donald Trump signs trade sanctions against China on March 22, 2018, at the White House in Washington, DC.

Text by NEWS WIRES

Latest update : 2018-04-04

The Trump administration on Tuesday raised the stakes in a growing trade showdown with China, targeting some 1,300 products with 25 percent tariffs to try to force changes in Beijing's intellectual property practices.

The U.S. tariff unveiling, representing about $50 billion of estimated 2018 imports and aimed at dealing a setback to China's efforts to upgrade its manufacturing base, drew an immediate condemnation from Beijing, along with a threat of retaliatory action.

China's Ministry of Commerce said it "will soon take measure of equal intensity and scale against U.S. goods."

"We have the confidence and ability to respond to any protectionist measures by the United States," the ministry said in a statement quoted by the official Xinhua news agency.

The ministry did not reveal any specific countermeasures, but economists widely view imports of U.S. soybeans, aircraft and machinery as prime targets for trade retaliation.

The tariff list from the U.S. Trade Representative's office followed China's imposition of tariffs on $3 billion worth of U.S. fruits, nuts, pork and wine to protest new U.S. steel and aluminum tariffs imposed last month by U.S. President Donald Trump.

The standoff between the world's two largest economies has sparked market fears that they could spiral into a trade war that could crush global growth.

Asian share markets were mixed amid trade tension concerns, with Japan's Nikkei 225 off 0.1 percent but Shanghai's main index poised to open 0.3 percent higher.

Many consumer electronics excluded

The USTR list ranged from chemicals to light-emitting diodes to machine parts, but U.S. industry groups warned it would still hit supply chains that rely on Chinese components and would ultimately raise costs for consumers.

Many consumer electronics products such as cellphones made by Apple Inc. and laptops made by Dell were excluded, as were footwear and clothing, drawing a sigh of relief from retailers who had feared higher costs for American consumers.

But the USTR did include some key consumer products from China, including flat-panel television sets and motor vehicles, both electric and gasoline-powered with engines of 3 liters or less.

A Reuters analysis that compared listed products with 2017 Census Bureau import data showed $3.9 billion in flat-panel television imports, and $1.4 billion in vehicle imports from China.

Among vehicles likely to be hit with tariffs is General Motors Co's Buick Envision sport-utility vehicle, which is assembled in China and sold in the United States.

Volvo, owned by China's Geely Motors, also exports Chinese-built vehicles to the United States.

More than 200 products on the list saw no U.S. imports last year, including large aircraft and communication satellites, while some categories were highly unlikely to ever be imported, such as artillery weapons.

Publication of the tariff lists starts a public comment and consultation period expected to last around two months, after which USTR said it would issue a "final determination" on the product list. It has scheduled a May 15 public hearing on the tariffs.

China ran a $375 billion goods trade surplus with the United States in 2017, a figure that Trump has demanded be cut by $100 billion.

(REUTERS)

Date created : 2018-04-04

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