China and the United States have kicked off a tit-for-tat exchange of trade tariffs, with the US introducing a 25 percent tariff on $38 billion worth of Chinese goods to take effect from July 6.
Over the weekend, Beijing hit back with tariffs on the same dollar amount of American goods.
In April, the Trump administration outlined around 1,300 products worth $50 billion that would be hit with the proposed tariff. On Friday, that list had been reduced to 1,102 items of the same value, with 818 items worth $34 billion set to be hit with tariffs from July, and the $16 billion remainder to undergo further review and a public hearing on July 24 before a final determination is made.
“We must take strong defensive actions to protect America’s leadership in technology and innovation against the unprecedented threat posed by China’s theft of our intellectual property, the forced transfer of American technology, and its cyber attacks on our computer networks,” said United States Trade Representative Robert Lighthizer.
“China’s government is aggressively working to undermine America’s high-tech industries and our economic leadership through unfair trade practices and industrial policies like ‘Made in China 2025’. 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.”
For its part, China said it “doesn’t want a trade war” but has to “fight back strongly”, a Commerce Ministry statement said on Saturday.
In a statement on Friday, US President Donald Trump promised further action if Beijing hit back.
“The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China,” Trump said.
Australian Trade Minister Steve Ciobo said the trade war between China and the United States will hurt global growth and job creation.
“None of this is good for global trade. These moves will provide a further drag on global growth, and that’s a net negative,” Ciobo told reporters in Sydney on Saturday.
Ciobo said it is too early to say how the tariffs would affect Australia.
“As we see these tariffs go up on both sides — China-USA , Canada-USA, Mexico-USA, Europe-USA — these are drags on global growth, they’re drags on opportunities to create employment,” he said.
The trade minister said a third of Australia’s GDP growth had come from new export markets opened up in China, Japan, Korea, and Singapore thanks to free trade deals.
Washington began the process of installing tariffs on certain Chinese imports in March.
“We have a trade deficit, depending on the way you calculate, of $504 billion, now some people would say it is really $375 billion,” Trump said at the time. “Many different ways of looking at it, but any way you look at it, it is the largest deficit of any country in the history of our world — it’s out of control.
“We are doing things for this country that should have been done for many, many years — we’ve had this abuse by many other countries and groups of countries that were put together in order to take advantage of the United States, and we don’t want that to happen, we’re not going to let that happen.”
After Washington slapped a seven-year ban on Chinese telecommunications equipment giant ZTE in May, Trump reversed course and the US has now reached a deal with ZTE that will see it pay a $1 billion fine and change its board.
White House trade adviser Peter Navarro said last week the deal was a personal favour to the Chinese president, and said if the company fell foul of the US one more time, it would be shut down.
The Trump administration has unveiled 25 percent tariffs on some 1,300 Chinese products to force changes in Beijing’s intellectual property practices.
The US administration is looking to impose tariffs on $60 billion of Chinese imports, with technology and telecommunications among the major sectors targeted.
China’s integrated circuit (IC) industry grew 21 percent per year from 2013 to 2017, the Ministry of Industry and Information Technology has said, five times the global average.
The tariffs could affect $50-$60 billion worth of goods and increase trade tensions.
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