China hikes tariffs on US products

A trade war between the US and China is starting after China raising tariffs on a $US34 billion list of American products, in response to new US tariffs.

China's President Xi Jinping with US President Donald Trump

Ties are at risk after US President Donald Trump levied $50 billion in tariffs on Chinese goods. Source: AAP

China has fired back in a spiraling trade dispute with President Donald Trump by raising import duties on a $US34 billion ($A45.7 billion) list of American goods including soybeans, electric cars and whiskey.

The government said it was responding in "equal scale" to Trump's tariff hike on Chinese goods in a conflict over Beijing's trade surplus and technology policy that companies worry could quickly escalate and chill global economic growth.

China "doesn't want a trade war" but has to "fight back strongly," said a Commerce Ministry statement. It said Beijing also was scrapping agreements to narrow its multibillion-dollar trade surplus with the United States by purchasing more American farm goods, natural gas and other products.

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's industry development tactics violate its free-trade pledges and hurt American companies. Europe, Japan and other trading partners raise similar complaints, but Trump has been unusually direct about challenging Beijing and threatening to disrupt such a large volume of exports.

"In this trade war, it's the US who is playing the role of provocateur, while China plays defence," said the Global Times, a newspaper published by the ruling Communist Party. "China is a powerful guardian and has enough ammunition to defend existing trade rules and fairness."

Beijing will impose an additional 25 per cent tariff starting July 6 on 545 products from the United States including soybeans, electric cars, orange juice, whiskey, lobsters, salmon and cigars, according to the Ministry of Finance.

Most are food and other farm goods, hitting Trump's rural supporters hardest.

Beijing appeared to be trying to minimise the impact on its own economy by picking US products that can be replaced by imports from other suppliers such as Brazil or Australia.

Chinese regulators also are considering a tariff hike on an additional 114 products including medical equipment and energy products, the Finance Ministry said. It said a decision would be announced later.

That mirrored the Trump administration's announcement Friday of a tariff hike on $US34 billion of Chinese goods, also due to take effect July 6, and plans to consider widening it to an additional $US16 billion of other products.

China's heavily regulated economy also gives the ruling Communist Party additional options for retaliation by withholding approval for business activity.

Anti-monopoly regulators are believed to have delayed announcing a decision on US tech giant Qualcomm's proposed acquisition of semiconductor maker NXP in part due to the tariff conflict. Other companies say the approval process for licences has slowed down.

"China's retaliation will remain calibrated and largely reciprocal, with President Xi Jinping ready to counter any move by Trump," said Eurasia Group in a report. "Beijing has a freer hand for informal retaliation, which will now start to increase."

The American Chamber of Commerce had appealed to Washington to avoid a tariff hike but said Trump's threat has prompted Beijing to engage in more intensive negotiations than it had in recent years.


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Source: AAP


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China hikes tariffs on US products | SBS News