Fri, Aug 24, 2018 - Page 1 News List

US, China enact new tariffs

AP, BEIJING

A worker yesterday stands among bundles of aluminum ingots at a China National Materials Storage and Transportation Corp stockyard in Wuxi, China.

Photo: Bloomberg

The US and China yesterday went ahead with tariff hikes on billions of US dollars of each other’s automobiles, factory machinery and other goods in an escalation of a battle over Beijing’s technology policy that companies worry would chill global economic growth.

The increases came as envoys met in Washington for their first high-level talks in two months.

They gave no sign of progress toward a settlement over US complaints that Beijing steals technology and its industry development plans violate Chinese free-trade commitments.

The 25 percent duties apply to US$16 billion of goods from each side, including automobiles and metal scrap from the US and Chinese-made factory machinery and electronic components.

In the first round of tariff hikes on July 6, US President Donald Trump imposed 25 percent duties on US$34 billion of Chinese imports. Beijing responded with similar penalties on the same amount of US goods.

Beijing criticized the latest US increase as a violation of WTO rules and vowed to file a legal challenge.

Chinese Ministry of Foreign Affairs spokesman Lu Kang (陸慷) declined to give details of the Washington talks.

Beijing has rejected US demands to scale back plans for state-led technology development that its trading partners say violate its market-opening commitments. US officials worry they might erode the US’ industrial leadership.

With no settlement in sight, economists say that the conflict could spread and knock up to 0.5 percentage points off global economic growth through 2020.

Ahead of the Washington talks, Chinese state TV mocked Trump with a sarcastic video posted on YouTube and other social media pages of its international arm, China Global Television Network.

“You are great,” a presenter on the nearly three-minute English-language clip said, reading a letter that pays a satirical tribute to Trump.

“On behalf of doctors, thank you for pointing out the need to wean off American goods like bourbon and bacon,” the presenter says.

The video appeared to have been removed yesterday.

Trump has proposed another possible round of tariff hikes, imposing 25 percent increases on an additional US$200 billion of Chinese goods. Beijing issued a US$60 billion list of US imports for retaliation if Washington goes ahead with that.

That smaller target list reflects the fact that Beijing is running out of US goods for retaliation due to their lopsided trade balance.

China’s imports from the US last year totaled about US$130 billion. That leaves about US$20 billion for penalties after tariffs already imposed or planned on a total of US$110 billion.

Chinese authorities have said they would take “comprehensive measures,” which companies worry could mean targeting operations of US firms in China for disruption.

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