Washington D.C., USA: US President Donald Trump announced today that new tariffs imposed on Chinese goods will be applied to goods “that contain industrially significant technologies” and were introduced in response to the alleged theft of intellectual property .
The US president called the move a clampdown on unfair trade practices by Beijing and warned that Washington would impose additional measures if the Chinese part retaliated.
China warned the White House Friday that it will respond “in the first instance” to protect its economy if President Trump moves forward with any tariffs on $50 billion worth of Chinese goods.
At the daily briefing in Beijing on Friday, Chinese Foreign Ministry spokesman Geng Shuang said, “If the U.S. side adopts unilateralism and protectionism and damages China’s interests, we will respond in the first instance and take necessary measures to firmly safeguard our legitimate rights and interests.”
China will impose tariffs on some US products worth about $50 billion starting July 6, China’s State Council later said. The list includes a 25 per cent duty on 659 imported items including agricultural products, automobiles and aquatic products, according to a statement from the Ministry of Finance. It did not provide further details on the exact items. The tariffs on 34 billion worth of goods come into effect on July 6, the same day as US tariffs on China, with the additional 16 billion to be imposed later.
Trump, fresh from his return from the Singapore Summit with North Korean leader Kim Jong Un, decided to enact significant tariffs on Chinese goods.
Such a move would mark a significant step toward a full-blown trade war between the United States and China despite months of trade talks and negotiations in an effort to avoid that outcome.
Media reports earlier suggest that the Trump administration plans to unveil its tariffs Friday just hours after Secretary of State Mike Pompeo returned from his first visit to Beijing where he met with his Chinese counterparts and President Xi Jinping.
Although Pompeo was in Beijing to debrief the Chinese on the Singapore summit, the trade friction was never far from the surface.
In a joint news conference Thursday evening in Beijing, Chinese Foreign Minister Wang Yi said China and the United States have two options before them: one is “cooperation” and a “win-win” scenario and the other is “lose-lose.”
“China opts for the first one and has made such a decision,” Wang said before warning, “we hope the U.S. will make a wise choice and China on its part is prepared on all fronts.”
In April, the U.S. revealed an initial list targeting about 1,300 products worth $50 billion in Chinese imports. The U.S. is reportedly also nearing completion of a second list of products ordered by Trump, worth $100 billion, which would be subject to the same public hearing process as the first. That could bring a another wave of duties after 60 days or more.
The White House has said the first series of duties will be implemented “shortly” after the release of Friday’s list, though no date has been set.
The Shanghai Composite Index dropped to its lowest since September 2016 and a whisker away from the 3,000-point mark, as markets await the looming announcement of the list of targets. U.S. futures dropped after media reports of the $100 billion list.
The Dow Jones Industrial Average looked set to fall on Friday as President Donald Trump announced tariffs on $50 billion worth of Chinese imports, reigniting fears that a clash between the world’s largest economic power could erupt into a full-fledged trade war.
Futures for the Dow YMU8, -0.83% fell nearly 200 points, or 0.8%, at 25,015, putting the Dow DJIA, -0.10% on track to post a fourth straight decline. Futures for the S&P 500 ESU8, -0.56% fell 0.5% at 2,774, while those for the Nasdaq-100 NQU8, -0.52% slumped by 0.5% at 7,277.
Below is the Trump Statement Imposing 25% tariff On $50bln In China imports:
Statement by the President Regarding Trade with China
“My great friendship with President Xi of China and our country’s relationship with China are both very important to me. Trade between our nations, however, has been very unfair, for a very long time. This situation is no longer sustainable. China has, for example, long been engaging in several unfair practices related to the acquisition of American intellectual property and technology. These practices, documented in an extensive report published by the United States Trade Representative (USTR) on March 22, 2018, harm our economic and national security and deepen our already massive trade imbalance with China.
In light of China’s theft of intellectual property and technology and its other unfair trade practices, the United States will implement a 25 percent tariff on $50 billion of goods from China that contain industrially significant technologies. This includes goods related to China’s Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the United States and many other countries. The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices.
These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs. In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China.
The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China.”