China Hammers US Goods With Tariffs As Sparks Of Trade War Fly
Beijing escalates spat by raising tariffs imposed on 128 American goods by up to 25%
Nuts imported from the US at a supermarket in Beijing.
Beijing: China has increased tariffs by up to 25 per cent on 128 US products including frozen pork, wine and certain fruits and nuts, escalating a spat between the world’s biggest economies in response to US duties on imports of aluminium and steel.
The tariffs, to take effect on Monday, were announced late on Sunday by China’s finance ministry and matched a list of potential tariffs on up to $3 billion in US goods published by China on March 23.
Soon after the announcement, an editorial in the widely read Chinese tabloid Global Times warned that if the US had thought China would not retaliate or would only take symbolic counter-measures, it can now “say goodbye to that delusion.”
“Even though China and the U.S. have not publicly said they are in a trade war, the sparks of such a war have already started to fly,” the editorial said.
China’s Ministry of Commerce said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 US goods, including fruit and ethanol. The tariffs on those products will be raised by an extra 15 per cent.
List of goods hit by hike in tariffs
China’s Ministry of Commerce released its list of the 128 US products on which it intended to impose tariffs on March 23. The tariffs came into force.
A. Fresh fruit, dried fruit and nut products■ 78 varieties of nuts and fruit are listed.
B. Wine
C. Modified ethanol■ Modified ethanol and other alcohols of any concentration
D. American Ginseng■ American, fresh and other forms of ginseng
E. Seamless steel pipe■ 33 types of steel pipes
F. Pork products■ Fresh and frozen pork products
G. Scrap aluminiumSource: China Ministry of Commerce
Eight other products, including pork and scrap aluminium, will now be subject to additional tariffs of 25 per cent, it said, with the measures effective from April 2.
$3b
potential income from the newly imposed tariffs
“China’s suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China’s interests,” the Chinese finance ministry said.
The retaliatory tariffs came amid escalating trade tensions between Beijing and Washington, which have rocked global financial markets in the past week as investors feared a full-blown trade spat between two countries will be damaging for world growth.
US President Donald Trump is separately preparing to impose tariffs of more than $50 billion on Chinese goods intended to punish Beijing over US accusations that China systematically misappropriated American intellectual property - allegations Beijing denies.
China has repeatedly promised to open its economy further, but many foreign companies continue to complain of unfair treatment. China warned the United States on Thursday not to open a Pandora’s Box and spark a flurry of protectionist practices across the globe.
“There are some people in the West who think that China looks tough for the sake of a domestic audience, and would easily make concessions in the end,” the Global Times editorial said.
120
US goods China was earlier obligated to reduce tariffs on
“But they are wrong.” The Global Times is run by the ruling Communist Party’s official People’s Daily, although its stance does not necessarily reflect Chinese government policy.
In a statement published on Monday morning, the Chinese commerce ministry said the United States had “seriously violated” the principles of non-discrimination enshrined in World Trade Organization rules, and had also damaged China’s interests.
“China’s suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organization,” it said, adding that differences between the world’s two largest economies should be resolved through dialogue and negotiation.
Warring for trade
Trade wars in their strictest sense are relatively rare in history, but significant wars have been fought over trade and tariffs — and the United States itself owes its foundation to one such war.
■ 1348-1349: The Byzantine-Genoese War. Most trade passing through the Bosphorus stopped at the Genoese port of Galata, with just 15 per cent stopping at Constantinople. In 1348, the Byzantine Empire dropped their tariffs below Galata’s in an effort to bring in more trade. The Genoese retaliated by sinking the Byzantine fleet, and the Byzantines burnt Galata before peace was negotiated.
■ 1773: The Boston Tea Party. The British Townsend Tax of 1767 imposed duties on sales of tea, leading to North Americans turning to Dutch imports. The British Tea Act of 1773 was an attempt to undercut the ‘smuggled’ tea. The destruction of East India Company tea at Boston was a key build-up to the American Revolutionary War and the foundation of the United States of America.
■ 1806-1814: The Napoleonic Blockade. The early phases of the Napoleonic Wars saw British exports to the continent fall by up to 55 per cent. When Napoleon realised the British were still exporting through Spain and Russia, he instigated the Berlin Decree of 1806, and invaded both countries, eventually leading to his defeat in the Peninsular War and his retreat from Moscow in 1812.
■ 1839-1860: The Opium Wars. Disputes over Anglo-Chinese trade resulted in the Opium Wars, which ultimately weakened China’s Qing dynasty and forced it to open up trade with other nations.
■ 1906-1908: The Pig War. The dominant Austro-Hungarian Empire unsuccessfully tried to impose a customs blockade on Serbian pork, its major export. Serbia opened up trade with France and Bulgaria, and Austria-Hungary was forced to climb down, ending the blockade in 1908.
■ 1934: The Smoot Hawley Act. During the Great Depression the US imposed high tariffs on imports of agricultural and manufactured goods in an effort to protect domestic producers. Other nations retaliated. The move, repealed in 1934, likely exacerbated the depression in the US and prolonged the recovery of world trade.
■ 1948: The General Agreement on Tariffs and Trade. An international agreement of 75 countries to reduce tariffs and barriers to trade, now operated by the World Trade Organisation.
■ 1995: The World Trade Organisation founded under the Marrakesh Agreement of 1994. Comprised 164 member states to regulate trade of goods, services and intellectual property through trade agreements and dispute resolution.
■ 2016: US Presidential election. Presidential candidate Donald Trump repeatedly criticises the North American Free Trade Agreement (NAFTA) and Trans-Pacific Partnership (TPP) trade agreements, and threatens 45 per cent tariffs on Chinese imports to the US.
■ January 23, 2017: President Trump pulls the US from the TTP three days after being sworn in.
■ January 23, 2018: President Trump announces four years of tariffs on imported solar panels, falling from 30 per cent in the first year, to 15 per cent in the fourth. Three years of tariffs are imposed on washing machines.
■ March 1, 2018: President Trump announces his intention to put a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminium imports.
■ March 8, 2018: President Trunmp signs an order to impose steel and aluminium tariffs after 15 days. Canada and Mexico are granted exemptions.
■ March 22, 2018: The White House announces exemptions to steel and aluminium tariffs for Canada, Mexico, the European Union, Australia, South Korea, Brazil and Argentina until May 1, 2018.
■ March 22, 2018: President Trump signs a memorandum imposing tariffs on $50 billion worth of Chinese goods, with a list of such goods to be produced within 15 days and a further 30 days of public consultation.
—Staff Report
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