THE ONGOING TRADE war between the US and China stepped up a gear yesterday after China announced it would be imposing painful tariffs on $60 billion worth of US exports by next month.
It comes in response to the decision from US President Donald Trump to slap similar tariffs on Chinese exports into the US last week.
Yesterday, Trump tweeted that things would “only get worse” if China retaliated, but Beijing said last night it was taking the measures as a response to the US’s “unilateralism and trade protectionism”.
Both sides left the door open for reconciliation with Trump saying he expected a “fruitful” meeting next month with his Chinese counterpart Xi Jinping at a Group of 20 summit in Japan. China, meanwhile, said it hoped it could work with the US on a “win-win agreement”.
The US president and other senior officials have claimed they have the upper hand in the trade war but the measures announced yesterday by China include boycotting US agriculture, dumping American debt and cutting orders for Boeing aircraft.
The increase in duty rates targets a range of American agricultural and manufactured goods, kicking levies up as high as 25%, according to a statement by the Tariff Policy Commission of the State Council – China’s cabinet.
Despite the retaliation, Beijing also appeared to give time to find a resolution by setting the June 1 date for those increases to take effect.
But in a news conference, Trump was buoyant, telling reporters that his decision to increase tariffs was “a very positive step”.
“I love the position we’re in,” he said during a joint news conference at the White House with Hungarian Prime Minister Viktor Orban.
“There can be some retaliation but it can’t be very substantial by comparison.”
Trump called on manufacturers fearful of the US tariff increases to build their wares in the United States – or at least outside of China.
He said he was considering adding 25% duties on the remaining $325 billion in Chinese exports not currently subject to US tariffs.
“That is a tremendous amount of money that would come into our country,” Trump said. “I have not made that decision yet.”
Trump launched the trade war last year to extract profound economic reforms from Beijing, accusing China of seeking to forge global industrial dominance through massive state intervention in markets and the theft of American technology – all in violations of its commitments upon joining the World Trade Organization in 2001.
Beijing rejects the charges and the United States and China have so far exchanged tariffs on more than $360 billion in two-way trade.
“China will never surrender to external pressure,” foreign ministry spokesman Geng Shuang said at a regular briefing yesterday.
Economists say the US-China trade war will weigh on the global economy, which is already forecast to slow this year.
With reporting from AFP
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