Trump targets $50bn in China goods, vows more if needed

Gladys Abbott
June 17, 2018

Responding to US President Donald Trump's decision to impose tariffs on $50 billion worth of Chinese imports, Beijing has adopted a 25 percent tariff on 659 American products worth the same amount.

"The impact of trade conflict between the world's two largest economies will lead to serious consequences for economic growth and job creation and hurt those that are most vulnerable across the globe", Cargill Global Corporate Affairs Vice President Devry Boughner Vorwerk said Friday. It has previously said American products targeted for tariffs would include U.S. aircraft and soybeans.

The official also said the U.S. statement, which said Washington would continue to impose additional tariffs if China takes retaliatory measures, has come to China's notice and it reserves the rights to take corresponding measures.

That mirrored the Trump administration's announcement Friday of a tariff hike on $34 billion of Chinese goods, also due to take effect July 6, and plans to consider widening it to an additional $16 billion of other products.

The Chinese commerce ministry issued a statement condemning the Trump administration's most recent tariffs, stating its intent to match all tariffs with equal restrictions on USA trade in a tit-for-tat battle over trade.

Trump officials said the products to be hit with tariffs include those that benefit from the "Made in China 2025" policy, an effort by Beijing to ramp up aerospace, robotics and other manufacturing industries. Goods like televisions and birth control, which had initially been proposed for inclusion, were removed from the final tariff list.

Beijing has announced its own tariff measures targeting Washington, following the White House's confirmation on Friday that a new round of duties against Chinese goods will go into effect in three weeks.

China has also promised to levy tariffs on another round of products that will include coal, crude oil, gasoline and medical equipment.

Washington has also completed a second list of possible tariffs on another US$100 billion of Chinese goods, in the expectation that China will respond to the initial USA tariff list in kind, sources said. "The Chinese side firmly opposes that".

United States trade representative Ambassador Robert Lighthizer said: "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".

"Look, he's my friend, President Xi".

The Global Times, meanwhile, said Mr Trump was disrupting the world order to appeal to voters who think he's fighting for them.

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China also appealed to other countries to pressure the USA to end recent protectionist trade policies.

"Anything that affects the supply chain is obviously not a great thing", said Kristan Porter, president of the Maine Lobstermen's Association.

US and European stocks fell and bonds gained on the news.

As Reason has noted repeatedly, tariffs are unlikely to be an effective tool in getting China to stop infringing American intellectual property.

"We're shooting ourselves in the foot", U.S. Rep. Erik Paulsen, R-Minn., said in a news release.

Releasing details about what products would be affected by the tariffs, the USA trade representative's office said "the list of products issued today covers 1,102 separate U.S. tariff lines".

China now imports about 363,000 barrels of U.S. crude daily, on par with Canada as the biggest U.S. crude importer, according to U.S. Energy Department figures. He threw a meeting of the Group of Seven into turmoil by revoking support for the group's joint statement and berating the summit's host, Canadian Prime Minister Justin Trudeau.

A tariff would discourage Chinese refiners from buying US crude imports.

The U.S. isn't the only country in the lobster trade.

"We feel these tariffs are very damaging to our agricultural economy". Beijing is an important player in talks with North Korea on abandoning its nuclear-weapons program. Canada also harvests lobsters and is a major trading partner with China.

Trump is correct in part of his assessment.

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