WASHINGTON/BEIJING – China on Friday struck back against US PresidentDonald Trump s trade offensive, intensifying the expanding andunpredictable dispute between the world s two largest economies.
Late Friday, China announced it was expanding its existing complaintagainst the United States at the World Trade Organization, hours after thecountries slapped tit-for-tat tariffs on billions of dollars ofcross-border trade.
Beijing called the new stage of the confrontation — which began whenWashington pulled the trigger on 25 percent duties on $34 billion annualimports of Chinese machinery, electronics and other goods — “the largesttrade war in economic history.”
And China s foreign ministry said retaliatory tariffs of equal size andscope had taken effect “immediately.”
There was confusion about exactly what US products would be hit in theinitial wave of tariffs as China s Commerce Ministry had not published anupdated list.
Economists have warned escalating trade frictions could throttle globalgrowth and strike at the heart of the world trading system, causingeconomic shockwaves and potentially disrupting years of global growth.
US trade data released Friday showed exports hit a record, as importersbumped up purchases, particularly of tariff-targeted US soy beans, to buildup supplies before the new duties hit.
Analysts said this was the quiet before the storm, with US exports likelyto fall off in the third quarter as both sides feel the effects ofworsening trade relations.
The new tariffs could just be the opening skirmish in the trade war, as USPresident Donald Trump has vowed to hit as much as $450 billion in Chinesegoods, the vast majority of that country s imports.
That would add to disputes underway with Canada, Mexico and the EuropeanUnion, which could worsen if he goes ahead with threatened tariffs on autos.
China s government also announced it was adding this round of US tariffs toan existing complaint filed with the WTO in April shortly after Washingtonunveiled the threat to punish Beijing for its policies on intellectualproperty.
Months of dialogue between the two economic superpowers, including in theWTO, appeared to have failed, with Trump warning just hours before thetariffs came into effect that Washington was ready to escalate the disputewith duties on hundreds of billions of dollars more in Chinese imports.
Trump repeatedly has slammed what he describes as Beijing s underhandedeconomic treatment of the United States. The US trade deficit in goods withChina ballooned to a record $375.2 billion last year, stoking his ire.
US officials accuse China of building its industrial dominance by stealingthe “crown jewels” of American technological know-how through cyber-theft,forced transfers of intellectual property and state-sponsored corporateacquisitions.
A US court on Friday imposed the maximum $1.5 million fine for theft oftrade secrets by the Chinese company Sinovel in a case that typifiedWashington s complaints about Beijing s conduct.
Prosecutors said AMSC lost 700 jobs and more than $1 billion in shareholderequity after Sinovel stole technology, including software, used inproducing and operating wind turbines.
Sinovel has agreed to pay AMSC a total of $52.5 million in restitution.
Despite dire warnings about the impact on the US, Trump believes the robustAmerican economy can outlast its rivals in the current battle.
But China also believes its economy, with a greater focus on domesticdemand and a reduced dependence on exports, can ride out the storm.
China central banker Ma Jun said the first punches will have only a”limited impact” on the nation s economy, trimming GDP growth by 0.2percentage points.
With only $130 billion in US imports to retaliate against, Beijing has saidit will take “qualitative” and “quantitative” measures against the US,triggering fears it could cripple the operations of US multinationalsoperating there.
China s Premier Li Keqiang said on a visit to Sofia that “A trade warbenefits no-one because it hurts free trade and the multilateral process.”
Global markets initially wobbled at the news but soon forged higher withWall Street finishing up solidly on bullish employment numbers while Asianand European stocks also cast aside their worries, at least for now.
On the streets of Beijing, there were some concerns that prices would risedue to the tariffs but also a determination to support the Beijingauthorities in the trade war.
“I will try my best to support domestic products. I think products made inChina are the best,” said one shopper in a Beijing grocery story, who gavehis name as Yang.
Moscow also announced Friday it had slapped 25 percent tariffs on some USgoods, joining the global push-back against Trump s offensive. – APP/AFP