US, China hike tariffs even as both hold talks
BEIJING: The United States slapped steep tariffs on another $16 billion in Chinese goods on Thursday, triggering a swift tit-for-tat retaliation from Beijing, even as negotiators from both sides seek to soothe trade tensions.
The latest action completes the first round of $50 billion in Chinese products that President Donald Trump targeted with Beijing striking back at American products dollar-for-dollar at each step.
China “firmly opposes the tariffs and has no choice but to continue to make the necessary counter-attacks”, the commerce ministry said in a statement.
Beijing hit back with tariffs on an equal amount of US goods, targeting iconic products such as Harley-Davidson motorcycles, dump trucks and asphalt, among hundreds of others.
China’s commerce ministry said the US tariffs were “clearly suspected” of violating World Trade Organization and noted it would file a lawsuit against them under the WTO’s dispute resolution mechanism.
The escalation came as the world’s two largest economies hold their first formal discussions since June on the spiraling trade war.
Trump has pushed aggressive trade actions to lower the US trade deficit, which he equates with theft from Americans. But US trading partners have retaliated aggressively, which is hurting American farmers, manufacturers and consumers.
US businesses have become increasingly concerned about the tariffs, which are raising prices for manufacturers and could hurt the economy, although the prospect of a negotiated solution buoyed world markets this week.
However, Federal Reserve officials have warned that “an escalation in international trade disputes was a potentially consequential downside risk for real activity”, according to the minutes of its July 31-August 1 policy meeting.
Still pending is the possibility of new duties on another $200 billion in Chinese goods, which are the subject of public hearings this week, as well as Trump’s proposed 25 percent taxes on all auto imports to protect the US car industry.
China has responded by threatening to impose new tariffs on $60 billion worth of US goods, while Beijing could also target the local operations of US corporations with inspections and boycotts as it has done in past disputes with South Korea and Japan.
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