[After months of skirmishing between the two economic powers, U.S. customs officers began collecting the first tariffs from importers of Chinese products on July 6. China immediately retaliated with similar tariffs on U.S. goods, including soybeans, pork and poultry, which were designed to hurt Trump voters in rural America.]
By David J. Lynch and Amanda
Erickson
China said Wednesday it will impose tariffs
on an additional $16 billion in U.S. autos and energy products in a sign that
Beijing and Washington are digging in for what could be a long and bruising
trade conflict.
The move came just hours after the Trump
administration confirmed plans to proceed with a previously-announced round of
import taxes on a range of Chinese products worth an equivalent amount.
The latest tariff salvos stem from President
Trump’s complaint that China is unfairly acquiring American technology via
coercive joint ventures with U.S. companies, cybertheft and other violations of
intellectual property rights.
After months of skirmishing between the two
economic powers, U.S. customs officers began collecting the first tariffs from
importers of Chinese products on July 6. China immediately retaliated with
similar tariffs on U.S. goods, including soybeans, pork and poultry, which were
designed to hurt Trump voters in rural America.
When the additional tariffs go into effect on
August 23, both sides will have taxes on about $50 billion worth of imports
from the other.
Trump also is moving forward with plans to
tax a further $200 billion in Chinese products as soon as September and has
threatened to eventually impose tariffs on all Chinese imports, which totalled
$505 billion last year, unless China capitulates.
The administration’s hard-line stance is
stirring doubts among congressional Republicans and business leaders who fear
it may rupture profitable commercial relations. With no talks taking place
between Chinese and American officials, some analysts say Trump’s use of
tariffs may be designed to reverse a quarter-century of growing economic ties
between the two countries, rather than to spur diplomatic bargaining.
“Their plan may not be to get China to cry
uncle. It may be pulling up the drawbridge,” said Scott Kennedy, director of
the project on Chinese business at the Center for Strategic and International
Studies. “Both sides are definitely serious and they’re going to go blow for
blow.”
Trump has claimed in recent tweets that
“tariffs are working far better than anyone ever anticipated,” linking them to
a downturn that has shaved nearly a quarter from the value of Chinese stocks
since late January. Along with the trade spat, Chinese stocks have suffered
from slowing growth in the debt-laden economy.
But China has notched a pair of concrete
victories in the trade showdown, according to Jeff Moon, a former U.S. trade
negotiator in the Obama administration.
After complaints by Chinese leaders, Trump
agreed to reverse a U.S. enforcement action that would have caused ZTE, a
prominent state-owned telecom company, to go out of business. And Chinese
regulators last month barred Qualcomm, a U.S. telecom leader, from completing
its $44 billion acquisition of Netherlands-based NXP, which would have made it
a more formidable competitor for Chinese companies.
“There are only two hard outcomes so far and
China’s winning 2-0,” Moon said.
In a statement Wednesday, the Chinese
Commerce Ministry charged that the United States “once again put domestic law
above international law by imposing ‘very unreasonable’ new tariffs on Chinese
goods.”
China’s announcement is a direct response to
new duties on Chinese goods imported into the United States, announced Tuesday
in Washington. Those new tariffs, totaling $16 billion, will be levied against
279 products, including motorcycles, steam turbines and railway cars.
After months of escalation, business
communities in both countries are wondering when and how the trade
confrontation will end.
“With each successive round of tariffs, Trump
continues to back China into a corner, forcing Beijing to respond in kind,”
said James Zimmerman, a partner in the Beijing office of international law firm
Perkins Coie and a former chairman of the American Chamber of Commerce in
China.
“There is no off-ramp, and Trump has given
China little wiggle room to save face and come to the bargaining table,” he
said. “By continuing to up the ante, Trump is, in effect, publicly demanding an
unconditional surrender from Beijing.”
Emily Rauhala contributed to this report.
