BEIJING: President Donald Trump’s tariffs on another $200 billion of Chinese imports took effect Monday, with Beijing accusing Washington of “economic intimidation” as the standoff between the world’s top two economies clouds the global outlook.
The latest volley against Beijing brings the amount of goods hit by duties to more than $250bn, roughly half of China’s US exports, with American consumers set to increasingly feel the pain.
Trump has hit 12 per cent of total US imports this year alone.
Defiant in the face of increasing fears about the impact to the US economy, Trump has threatened to hit all imports from China if it refuses to change policies he says harm US industry, particularly the theft of American technology.
“These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy,” he said in announcing the tariffs last week.
Beijing fired back Monday, accusing the US of making “false accusations” and using “increasing tariffs and other means of economic intimidation in an attempt to force its own interests on China by way of extreme pressure.” The charges came in a white paper published by China’s cabinet, the State Council, and claimed the US had turned toward “unilateralism, protectionism and economic hegemonism” as Trump pursues his “America First” agenda.
Talks cancelled: “We are going to win it,” Trump’s Secretary of State Mike Pompeo said of the trade war on “Fox News Sunday”.
“We’re going to get an outcome which forces China to behave in a way that if you want to be a power - a global power - transparency, rule of law, you don’t steal intellectual property.” Beijing’s retaliatory tariffs on $60bn in American goods were set to go into effect soon after the US action, the finance ministry announced last week.
China targeted 5,200 US goods with 5-10pc tariffs, including big ticket items such as liquefied natural gas, lumber and electronics, as well as peppermint oil, pig hides and condoms.
It leaves Beijing hitting $110bn worth of US goods, nearly everything China buys from the United States.
But Trump warned he could ramp up to “phase three”, with tariffs on approximately $267bn of additional imports, or all the goods the US buys from China.
Hopes for talks to resolve the issue appeared to have been dealt a blow as The Wall Street Journal reported Beijing cancelled the visit of a negotiating team expected September 27-28 in Washington.
“China’s door is always open for negotiations,” the state council’s white paper said, but added they “cannot be carried out under the threat of a big tariff stick, nor at the expense of China’s right to development.” Previous talks in late August saw little progress.
The International Monetary Fund has warned about the potential for “significant economic costs”, including slower growth, while Fitch Ratings has cut its growth estimates for China and the world for 2019.
Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook,” the agency said in a report on Friday.
The latest batch of Chinese imports to be hit will face 10pc tariffs through the end of the year, and then the rate will jump to 25pc.
A swathe of products are on the hit list, including Chinese-made voice data receivers, computer memory modules, automatic data processors, and accessories for office equipment such as copiers and banknote dispensers - instantly making widely used goods more expensive.
However, following complaints from thousands of US firms - including powerhouses like Apple and Walmart - 300 product lines were dropped from the target list.
Published in Dawn, September 25th, 2018