Beijing unveils tariffs on $60 billion of US goods

China has retaliated at the Trump administration’s plans to slap tariffs on $60 billion in Chinese goods, unveiling a list of similar duties on key US imports. (Reuters)
Updated 04 August 2018
0

Beijing unveils tariffs on $60 billion of US goods

  • Goods targeted include LNG, semiconductors, beef, aircraft
  • Washington threatened 25 per cent tariffs on $200 billion in China goods

BEIJING/SINGAPORE: China proposed retaliatory tariffs on $60 billion worth of US goods ranging from liquefied natural gas (LNG) to some aircraft on Friday, as a senior Chinese diplomat cast doubt on prospects of talks with Washington to solve their bitter trade conflict.
The Trump administration tightened pressure for trade concessions from Beijing this week by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. China vowed to retaliate while also urging Washington to act rationally and return to talks to resolve the dispute.
The United States and China implemented tariffs on $34 billion worth of each others’ goods in July. Washington is expected to soon implement tariffs on an additional $16 billion of Chinese goods, which China has already announced it will match immediately.
China has now either imposed or proposed tariffs on $110 billion of US goods, representing the vast majority of China’s annual imports of American products. Last year, China imported about $130 billion of US goods.
China’s finance ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, with the extra levies ranging from 5 to 25 percent.
Timing will depend on the actions of the United States, the Chinese Commerce Ministry said in a separate statement.
“The US side has repeatedly escalated the situation against the interests of both enterprises and consumers,” it said. “China has to take necessary countermeasures to defend its dignity and the interests of its people, free trade and the multilateral system.”
A top adviser to US President Donald Trump said the newly proposed tariffs were not as severe as the White House had been bracing for, and he warned China not to test Trump’s resolve.
“They better not underestimate the president,” White House National Economic Council Director Larry Kudlow said in an interview on Fox Business Network. “He is going to stand tough.”

Tensions weigh on Chinese markets
The United States alleges that China steals US corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America’s expense. Washington also wants China to stop subsidising Chinese companies with cheap loans, claiming that this allows them to compete unfairly.
Trump has said he is determined to reduce the large US trade deficit with China.
The US president has accused China and others of exploiting the United States in global trade, and has demanded Beijing make a host of concessions to avoid the new duties on $200 billion of Chinese goods, which could be imposed in the weeks after a comment period closes on Sept. 5.
Beijing says the United States is deliberately creating the trade conflict, using bullying tactics, and ignoring international negotiating norms so that it can stop the rise of China as a competitor on the world stage.
The rising tensions have weighed on Chinese stock and currency markets, with the Chinese yuan falling against the dollar.
“Instead of retaliating, China should address the long-standing concerns about its unfair trading practices,” White House spokeswoman Sarah Sanders said in an emailed statement.


Top diplomats meet
The two countries have not had formal trade talks since early June.
Still, two senior diplomats met earlier on Friday on the sidelines of a regional summit in Singapore.
China is willing to resolve differences with the United States “on the basis of an equal footing and mutual respect,” China’s top diplomat said after meeting US Secretary of State Mike Pompeo.
“He (Pompeo) was accommodating on this as a direction, and said that he does not want current frictions to continue,” said State Councillor Wang Yi, who is also China’s foreign minister.
Answering a reporter’s question about what was specifically said on trade, Wang said: “We did not speak in such details.”
“How can talks take place under this pressure?,” he added.
However, speaking to reporters at the White House, Kudlow said there had been some communication on trade “at the highest level” in recent days.
White House spokeswoman Lindsay Walters also said there had been “high-level discussions on multiple occasions in the past few months” and Washington remained open to further talks with China.


Condoms and coffee

Among US products targeted in the latest Chinese salvo were a wide range of agricultural and energy products, including liquefied natural gas. LNG’s inclusion marks a deployment by Beijing of one of its last major weapons from its energy and commodities arsenal in its fight with Washington.
The market is not large by value compared with approximately $12 billion of US crude that came to China last year, but LNG imports could shoot up as Beijing forges ahead with its plan to switch millions of households to the fuel away from coal.
Morgan Stanley has estimated annual Chinese imports of US LNG could rise to as much as $9 billion within two or three years, from $1 billion in 2017. The amount could be even larger if the United States resolves a logistics bottleneck.
“As the total value of goods under tariffs shoots up, China has little choice but to use LNG and others to top up the value,” said Lin Boqiang, professor on energy studies at China’s Xiamen University.
The American Petroleum Institute, a trade association whose members include Exxon Mobil Corp, Chevron Corp. and ConocoPhillips, said the new Chinese tariffs would hurt American workers.
“China is the third-largest importer of US LNG, but US LNG makes up only a modest but growing portion of China’s supply portfolio, which suggests that this particular trade dispute will hurt America more than it hurts China,” Kyle Isakower, API’s vice president for regulatory and economic policy, said.
Other US goods targeted by China in the latest list include semiconductors, some helicopters, small-to-mid-sized aircraft, condoms, iron ore, steel products, roasted coffee, sugar, foods containing chocolate, candies, and even car windscreens.
China’s biggest US imports by value in 2017 were aircraft and related equipment, soybeans and autos.


Germany sees ‘most difficult part’ in EU-US trade talks ahead

Updated 33 min 6 sec ago
0

Germany sees ‘most difficult part’ in EU-US trade talks ahead

  • ‘For some weeks and months now, we’re observing with concern that the US is tightening its trade policies, that tensions are increasing’
  • ‘The impact can already be seen in the world economy, global growth has slowed’

BERLIN: The most difficult part in trade negotiations between Europe and the United States is starting now and talks should focus on reducing tariffs on industrial goods to increase the chances of a deal, German Economy Minister Peter Altmaier said on Tuesday.
A confidential US Commerce Department report sent to President Donald Trump over the weekend is widely expected to clear the way for him to threaten tariffs of up to 25 percent on imported autos and auto parts by designating the imports a national security threat.
“For some weeks and months now, we’re observing with concern that the US is tightening its trade policies, that tensions are increasing,” Altmaier told Deutschlandfunk radio.
“The impact can already be seen in the world economy, global growth has slowed,” Altmaier said.
Asked about the risk of higher US car tariffs, Altmaier said he did not buy the argument that imported cars would threaten the national security of the United States.
Altmaier, a confidant of Chancellor Angela Merkel, said that reducing tariffs on cars and other manufactured goods should be the main focus of the ongoing trade talks.
“We are not yet where we want to be. We might have made one-third of the way and the most difficult part will be now,” Altmaier said.
Altmaier added that he was in favor of reducing import tariffs for cars to the same level in the US and Europe, “ideally to zero percent.”
The trade talks will also be high on the agenda during a meeting of Altmaier with his French counterpart Bruno Le Maire in Berlin later on Tuesday.
Both ministers are expected to narrow differences on how far the negotiation mandate of the European Commission in the talks with the US should go and which areas should be excluded.
France is reluctant to open up its agriculture sector to US imports and Altmaier said he was fine with excluding the issue in the trade talks.
“Agriculture is a very sensitive topic, so we don’t want to talk about this in the current situation,” Altmaier said.
Altmaier and Le Maire are expected to hold a news conference after the talks.
European Commission President Jean-Claude Juncker told a German newspaper that Trump had promised him he would not impose additional import tariffs on European cars for the time being.
If Trump imposed tariffs on European cars, however, the EU would react immediately and not feel obliged to stick to its promise to buy more soybeans and liquefied gas from the United States, Juncker added.