China has retaliated against the latest round of US import tariffs on its goods with a list of similar new tariffs on US imports, which also extends to imported cars.
Reuters reported that the new Chinese duties would apply to US imports including soybeans, planes, cars, beef and chemicals.
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The effective start date for the new charges – a 25% levy applying to some 106 products – will be revealed at a later time, though China’s Ministry of Commerce said the tariffs are designed to target up to US$50bn of US products annually. Beijing said the response was ‘proportionate’ to the latest US move.
Proposed US tariffs could take effect at the end of May (and are subject to consultation in the US) and China’s latest proposed retaliation would only follow such an implementation by the US.
President Trump has said that the US cannot live with its large trade deficit with China.
The tit-for-tat trade dispute between Washington and Beijing has rattled investors and fuelled market fears of a full-blown trade war.
Tariffs on US exports of cars to China would hit some firms hard – such as Tesla – because they lack manufacturing bases there. However, Ford and General Motors have high volume manufacturing joint ventures in China that would be largely unaffected.
Reuters notes that China’s latest list strikes at ‘signature US exports’, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states that voted for Donald Trump in the 2016 presidential election.
The report says Washington targeted products that benefit from Chinese industrial policy but Beijing’s appears aimed at inflicting political damage.
