U.S. escalates China trade showdown with tariffs on $50 billion in imports

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U.S. escalates China trade showdown with tariffs on $50 billion in imports

By David Lawder

 

U.S. President Donald Trump speaks during a joint news conference with Latvia's President Raimonds Vejonis, Estonia's President Kersti Kaljulaid and Lithuania's President Dalia Grybauskaite at the White House in Washington, U.S., April 3, 2018. REUTERS/Carlos Barria

 

WASHINGTON (Reuters) - The Trump administration on Tuesday raised the stakes in a growing trade showdown with China, announcing 25 percent tariffs on some 1,300 industrial technology, transport and medical products to try to force changes in Beijing's intellectual property practices.

 

The U.S. Trade Representative's office unveiled a list of mainly non-consumer products representing about $50 billion of estimated 2018 imports that would nonetheless hit supply chains for many U.S. manufacturers. The list ranges from chemicals to TV sets, motor vehicles and electronic components.

 

Publication of the tariff lists starts a public comment and consultation period expected to last around two months, after which USTR said it would issue a "final determination" on the product list. It has scheduled a May 15 public hearing on the tariffs.

 

The announcement drew a swift threat of retaliation from the Chinese embassy in Washington.

 

"As the Chinese saying goes, it is only polite to reciprocate. The Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against U.S. products in accordance with Chinese law," the embassy said in a statement.

 

The USTR target list follows China's imposition of tariffs on $3 billion worth of U.S. fruits, nuts, pork and wine to protest new U.S. steel and aluminium tariffs imposed last month by U.S. President Donald Trump.

 

The standoff between the world's two largest economies has sparked market fears that they could spiral into a trade war that could crush global growth.

 

CELLPHONES, COMPUTERS OFF LIST

 

The USTR tariff list conspicuously excluded many consumer electronics products such as cellphones and laptop computers assembled in China and also did not include clothing and footwear, drawing a sigh of relief from retailers who had feared higher costs for American consumers.

 

It did include Chinese-made flat-panel television sets and many electronic components, including light-emitting diodes increasingly used in lighting products. It also targeted vehicles such as motorcycles and electric cars, aircraft parts and electrical gear.

 

USTR Robert Lighthizer had said the tariff list was developed using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters, but limit the damage to U.S. consumers.

 

The largest categories of U.S. imports from China were communications equipment, totalling $78 billion in 2017, with computer equipment second at $58.6 billion, according to U.S. Census data compiled by the Congressional Research Service.

 

China ran a $375 billion goods trade surplus with the United States in 2017, a figure that Trump has demanded be cut by $100 billion.

 

But USTR said the China tariffs announced on Tuesday were proposed "in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises."

 

The agency added that such policies "bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans."

 

China has denied that its laws require technology transfers and has threatened to retaliate against any U.S. tariffs with trade sanctions of its own, with potential targets such as U.S. soybeans, aircraft or heavy equipment.

 

2025 PROGRAMME TARGETED

 

A USTR official said the tariff list targeted products that benefit from China's industrial policies, including the "Made in China 2025" programme, which aims to replace advanced technology imports with domestic products and build a dominant position in future industries.

 

The state-led 2025 programme targets 10 strategic industries: advanced information technology, robotics, aircraft, new energy vehicles, pharmaceuticals, electric power equipment, advanced materials, agricultural machinery, shipbuilding and marine engineering and advanced rail equipment.

 

Many products in those segments appear on the list, including antibiotics and industrial robots.

 

U.S. business groups reacted cautiously, saying they agreed with Trump's efforts to stop the theft of U.S. intellectual property, but questioning whether tariffs were the right approach.

 

"Tariffs are one proposed response, but they are likely to create new challenges in the form of significant added costs for manufacturers and American consumers," National Association of Manufacturers President Jay Simmons said in a statement.

 

U.S. Senator Marco Rubio said in a letter to Lighthizer and Treasury Secretary Steven Mnuchin that he was glad to see "bold" action against China.

 

"These necessary actions constitute an important break with the appeasement of previous administrations, and provide an opportunity to chart a new course for America’s relationship with this strategic competitor," Rubio wrote.

 

(Reporting by David Lawder; Editing by Peter Cooney)

 

-- © Copyright Reuters 2018-04-04

[lovelomsak]

I like this  Let them go at it.

  Americans are wasteful consumers. If this drives the prices up for the consumer maybe they will learn to stop consuming so much.

 Austerity may be what more Americans need to try.

 Also may end the slave labour used in countries like Thailand,Cambodia,Malaysia etc that produce this cheap sh:t

Edited April 4, 2018 by lovelomsak

[gogetem]

ANd if the Chinese go after American manufacturers and farmers, the government should pay them compensation just like they were soldiers in a fight.

[BEVUP]

I'm talking from an Auss point of veiw

I think all countries should put Tariffs on Asia, as they certainly do against the west 

But really it's all tit for tat stuff 

Take Auss for example their that stupid that they thought they got a good deal when Japan said they will drop 5% of the 30% meat tariff over 20 yrs 

Ther's basically no tariffs in Auss

[natway09]

Did you get a look at the US pork in the Bangkok Post.

I would not buy it ,,,,, Good opening for Thailand here. Their pork is terrific

[lovelomsak]

22 minutes ago, natway09 said:

Did you get a look at the US pork in the Bangkok Post.

I would not buy it ,,,,, Good opening for Thailand here. Their pork is terrific

Did China not take over pork production in the USA. I thought China owned the farms and slaughter houses. So basically it is a chinese business problem.

[Opl]

Tit-for-tat .. China hits US where it hurts , China is U.S.’s top soybean buyer; trade is worth $14 billion , soybeans are key ingredient for animal feed used on pig farms        https://www.bloomberg.com/news/articles/2018-04-04/china-to-levy-25-tariffs-on-u-s-soybean-imports-cctv-reports

 

 

 

Edited April 4, 2018 by Opl

[BuaBS]

China should stop exporting rare earth metals . This will hurt US weapon makers.

[lovelomsak]

If I get this right. This tariff squabble means the Chinese will starve and the Americans will have to buy raw materials from Canada.

 The chinese buy less soy bean  so produce less local pork and their  American farmed pork is too expensive to import. They may have to start eating more chicken.

Edited April 4, 2018 by lovelomsak

[Srikcir]

2 hours ago, Opl said:

Tit-for-tat .. China hits US where it hurts , China is U.S.’s top soybean buyer; trade is worth $14 billion , soybeans are key ingredient for animal feed used on pig farms        https://www.bloomberg.com/news/articles/2018-04-04/china-to-levy-25-tariffs-on-u-s-soybean-imports-cctv-reports

 

 

 

China has put into effect tariffs on about $3 billion worth of US imports, including wine, pork, fruit and steel pipes.

http://money.cnn.com/2018/04/04/news/economy/china-tariffs-us-goods-soybeans/index.html

[Stargeezr]

I hear that this latest USA.. China tiff, may help the latest NAFTA negotiations.  Hope so.

Geezer

[thedivezone]

In my mind there is not a trace of a doubt of who will win this trade war : US will suffer, . . China will suffer .. US electorate will suffer . . . , China electorate will suffer . . . 

US electorate will vote government out of power . . . 

Chinese electorate . . . 

will keep on suffering .

[samran]

The Chinese will be smart about this look to target exports that come from GOP voting districts. 

[Guest]

2 hours ago, samran said:

The Chinese will be smart about this look to target exports that come from GOP voting districts. 

Yup. This was is probably not good for Trump base.

 

 

[gogetem]

PT is exactly right in doing this now while the US economy is strong. Yes, it will mean sacrifices but the Chinese must be made to suffer for their unfair trade practices. The silent majority who backs our president understand that sacrifices must be made in the short run to secure a more prosperous future for future generations of Americans.

[Srikcir]

11 minutes ago, gogetem said:

our president understand that sacrifices must be made in the short run to secure a more prosperous future for future generations of Americans.

Sorry but "that does not compute."

Thanks to Trump's recent budget approvals US debt interest payments will quadruple, topping $1 trillion per year in as little as a decade - $55,000 per household -- just servicing our debt, more than we will spend each year on the military or Medicaid, and as a share of the economy, it is the highest in history.

https://edition.cnn.com/2018/03/15/opinions/trillion-dollar-debt-interest-opinion-macguineas/index.html

For what? Tax cuts to the most wealthy Americans (including Trump, the Trump Organization and Kushners) and the largest US corporations.

 

 

Edited April 5, 2018 by Srikcir
add link

[lovelomsak]

16 minutes ago, Srikcir said:

For what? Tax cuts to the most wealthy Americans (including Trump, the Trump Organization and Kushners) and the largest US corporations

Are you sure about this or just saying what you want people to believe?

[Cats4ever]

41 minutes ago, gogetem said:

PT is exactly right in doing this now while the US economy is strong. Yes, it will mean sacrifices but the Chinese must be made to suffer for their unfair trade practices. The silent majority who backs our president understand that sacrifices must be made in the short run to secure a more prosperous future for future generations of Americans.

What is it with the "silent majority". Do they lack speech, are they shy, suffer an inferiority complex, What?

Is it just a handy label that can be trotted out by some rabble rouser when it suits?

[Dap]

And that's why it's called a "Trade War".