[Beijing’s plan to institute new tariffs was announced just hours after the Trump administration detailed its own protections on a similar value of Chinese-made aircraft parts, cars and car parts, televisions, steel and much more. Following a previous round of tit-for-tat tariffs unveiled over the past few days, the new measures have sparked concerns that the dispute could widen further, hurting jobs and growth in both countries.]
By Keith Bradsher and Steven Lee Myers
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China on Wednesday outlined
plans to impose tariffs on soybeans and other
American goods.
Credit Daniel Acker/Bloomberg
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SHANGHAI
— China hit back at the
United States on Wednesday with proposed tariffs on $50 billion worth of
American soybeans, cars, chemicals and other goods, in a move likely to stoke
fears that the countries’ escalating confrontation could become an all-out
trade war.
Moving with unusual speed, Chinese officials
outlined plans to make it more costly to import 106 types of American goods
into China. They are intended to hit the United States square in the farm belt
— a major section of President Trump’s political support but also a major
supplier of what China stocks in its supermarkets.
Beijing’s plan to institute new tariffs was
announced just hours after the Trump administration detailed its own
protections on a similar value of Chinese-made aircraft parts, cars and car
parts, televisions, steel and much more. Following a previous round of
tit-for-tat tariffs unveiled over the past few days, the new measures have
sparked concerns that the dispute could widen further, hurting jobs and growth in
both countries.
Investors drove financial markets lower over
the prospect that the two sides were not yet done fighting.
“China has never succumbed to external
pressure,” Zhu Guangyao, vice minister of finance, said at a news briefing on
Wednesday. He added, “External pressure will only make the Chinese people more
focused on economic development.”
The question now is whether the two sides
will intensify their efforts to punish each other before they sit down to
negotiate. Neither set of tariffs go into effect right away, though the exact
timing of the Chinese measures was not clear.
The dueling tariffs still do not impact the
majority of trade between the two countries, which is valued at nearly $650
billion a year. Still, economists say that the clash could escalate quickly if
the two sides fail to find a way to quickly resolve their differences,
threatening a commercial relationship that is essential to the world economy.
Letting the dispute turn into a test of wills
would be a mistake, said Jie Zhao, a senior research fellow at Fudan University
in Shanghai.
“We should negotiate in a professional way,”
Ms. Zhao said, “and make it less ideological and emotional.”
China’s proposed new tariffs cover a
significant chunk of what it buys from the United States. The protections on
the $50 billion of goods announced on Wednesday, together with those on the $3
billion worth of products that Beijing unveiled earlier this week in
retaliation for American tariffs on global steel imports, account for about a
third of China’s American imports.
By contrast, because the United States
imports significantly more from China, tariffs on the same amount of products
make up roughly one-ninth of its Chinese imports. That gives the United States
more room to find other Chinese products to target.
Even as Chinese officials struck a defiant
tone on Wednesday, they still said they wanted to avoid escalating the
conflict.
“China’s attitude is clear,” Mr. Zhu, the
vice minister of finance, said. “We don’t want a trade war because a trade war
would hurt the interests of both countries.”
China could still fight back in other ways.
Its control over its domestic economy and news media, and its homegrown
internet, give it a strong hand in controlling public opinion and minimizing
the potential impact on its consumers. In the past, China has mobilized its
vast ranks of consumers to turn up their noses at products from Japan, the
Philippines and South Korea during political disputes, though getting Chinese
consumers to stop buying iPhones and Chevrolets could be trickier.
The two sides are clashing with the future in
mind. President Trump instituted his latest round of tariffs against China
while citing Beijing’s government-driven efforts to retool the country’s
economy to focus on the technologies of the future. Known as the Made in China
2025 program, the plan specifies efforts to build up cutting-edge industries
like robotics, aerospace and electric cars.
Many companies in Europe and the United
States say they fear the program will create state-supported competitors, an
argument that has won backing in the Trump administration. Some companies say
that Beijing finds ways to force them to hand over technology if they want to
sell their wares in China, an allegation that Chinese officials dispute.
China appears to show little interest in
putting the Made in China 2025 efforts on the negotiating table. A report in
state-controlled media on Wednesday described the development of advanced
manufacturing as “an inherent requirement for the transformation and upgrading
of China’s manufacturing industry, and it is also the only way for China’s
economy to enter a high-quality development stage.”
For now, China’s new tariffs could create a
more immediate issue for the Trump administration.
While they include plenty of goods Americans
make, they have a heavy focus on products Americans grow: soybeans, corn,
cotton, beef, frozen orange juice, even tobacco and whiskey. Many of those
products come largely from Republican-dominated states, where lawmakers might
be expected to have some influence with President Trump and could therefore
persuade him to back down from his latest trade demands.
For manufactured goods, the new Chinese
tariffs include cars and car parts, plastics, aerospace products and chemicals.
Many of those products are also sold by European companies, giving Chinese
buyers alternatives. The new tariffs announced on Wednesday will amount to 25
percent on the American products.
Chinese officials — who blamed President
Trump for provoking the clash — have appealed to the World Trade Organization,
which sets trade rules and moderates disputes, to resolve the feud. But both
sides risk censure by the W.T.O. — the Trump administration for its tariffs,
and China for swiftly retaliating without a proper review.
“A key time has come for the United States
and China to form a new consensus that includes intellectual property and the
opening up of markets,” said Song Guoyou, the deputy chief of the Center for
American Studies at Fudan University. “Otherwise, trade may fluctuate a lot.”
Follow Keith Bradsher and Steven Lee Myers on
Twitter: @KeithBradsher and @stevenleemyers.
