China Strikes Back in Trade War

China Strikes Back in Trade War

Beijing will hit 106 American products, including soybean, automobile, and chemicals, with a 25-percent tariff in response to US levies on Chinese goods, Bloomberg reports, citing a CCTV report of the State Council decision.

The move comes after Washington slapped nearly 1,300 Chinese goods with 25-percent tariffs. According to the White House, the measure is aimed at curbing “unfair” trade practices. The US list includes Chinese products ranging from chemicals and diodes to motorcycles and dental devices.

The list of US goods affected by Chinese tariffs reportedly includes vehicles, chemicals, some types of aircraft, soybean, corn, and other agricultural products.

China will also impose levies on American whisky, cigars and tobacco, some types of beef, lubricants, and propane and other plastic products.

US orange juice, certain sorghum products, cotton, some types of wheat, as well as trucks, some sport-utility vehicles, and certain electric vehicles, will also be subject to the new tariffs, according to the Chinese Finance Ministry.

China strongly condemns and firmly opposes the United States tariff proposals and is ready to take countermeasures on U.S. products, the Ministry of Commerce (MOC) said Wednesday.

A MOC spokesperson made the statement after the U.S. administration announced a proposed list of products subject to additional tariffs, which covers Chinese exports worth 50 billion U.S. dollars with a suggested tariff rate of 25 percent.

“Disregarding strong representations by China, the United States announced the tariff proposals that are completely unfounded, a typical unilateralist and protectionist practice that China strongly condemns and firmly opposes,” according to the statement.

The proposed list covers approximately 1,300 products imported from China, including industries such as aerospace, information and communication technology, robotics, and machinery, the Office of U.S. Trade Representative (USTR) said in a statement.

The U.S. side published the list in disregard of the mutually-beneficial and win-win nature of the China-U.S. commercial cooperation in the past 40 years, the appeal of the Chinese and American business communities and the interests of consumers, it said.

The move went against the interests of China, the United States and the world economy, seriously violating the basic principles and spirit of the World Trade Organization (WTO).

China plans to immediately bring relevant U.S. practice to the dispute settlement body of the WTO, and is ready to take countermeasures on U.S. products with equal force and scale that will be published in the coming days.

“We have the confidence and ability to respond to any U.S. trade protectionist measures,” the MOC spokesperson said.

Chinese Foreign Ministry spokesman Lu Kang also made a response Wednesday, saying the U.S. tariff proposals are “a typical unilateralist and protectionist action.”

China strongly condemns and firmly opposes such action, Lu said.

“We hope that the U.S. side, with sense and long-term picture in mind, refrain from going further down the wrong path,” the Chinese Embassy in the United States said in a statement on Wednesday.

Despite strong warnings from business groups and trade experts, U.S. President Donald Trump signed a memorandum on March 22 that could impose tariffs on Chinese imports and restrictions on Chinese investment in the United States.

The memorandum is based on a so-called Section 301 investigation, launched by the Trump administration in August 2017, into alleged Chinese intellectual property and technology transfer practices.

The move came after the U.S. administration took an increasingly hawkish turn on China, as it blamed its trade deficit with major trading partners for its domestic economic woes and job losses.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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