U.S. tariffs take effect, China warns of ‘counterattack’

The United States hiked tariffs on Chinese imports Friday and Beijing said it would be forced to counterattack in a dispute between the world’s two biggest economies that U.S. President Donald Trump says he is prepared to escalate.

Washington increased tariffs at 12:01 a.m. ET on $34 billion US worth of Chinese imports, a first step in what could become an accelerating series of tariffs.

China’s Commerce Ministry said it would be “forced to make a necessary counterattack.” It gave no immediate details but Beijing earlier released a target list of American goods for retaliation including soybeans, electric cars and whiskey.

Financial markets seemed to take the latest developments in stride. Japan’s Nikkei 225 index gained 1.4 per cent while the Shanghai Composite index jumped 0.7 per cent and Hong Kong’s Hang Seng surged 0.8 per cent.

U.S. ready to target $550B

Trump discussed the trade war Thursday with journalists who flew with him to Montana for a campaign rally. The president said U.S. tariffs on an additional $16 billion in Chinese goods are set to take effect in two weeks.

After that, the hostilities could intensify: Trump said the U.S. is ready to target an additional $200 billion in Chinese imports — and then $300 billion more — if Beijing does not yield to U.S. demands and continues to retaliate.

A truck driver waits for his load at the port in Savannah, Ga. The U.S. has imposed 25 per cent duties on $34 billion US in Chinese products. (Stephen B. Morton/Associated Press)

That would bring the total of targeted Chinese goods to potentially $550 billion — more than the $506 billion in goods that China shipped to the United States last year.

The Trump administration contends China has deployed predatory tactics in a push to overtake U.S. technological dominance. These tactics include cyber-theft and requiring American companies to hand over technology in exchange for access to China’s market.

‘No winners in a trade war’

The official newspaper China Daily accused the Trump administration of “behaving like a gang of hoodlums” who could do damage to the global economy unless other countries stop them.

“There should be no doubting Beijing’s resolve,” the newspaper said.

A worker sorts dried seafood for export at a factory in Lianyungang in China’s eastern Jiangsu province. China said it was “forced to take necessary countermeasures” after Washington imposed tariffs on billions of dollars in Chinese imports. (AFP/Getty Images)

The American Chamber of Commerce in China appealed to both sides to negotiate a settlement.

“There are no winners in a trade war,” said the chamber’s chairman, William Zarit, in a statement. It said American companies want fairer treatment but will be hurt by U.S.-Chinese tensions.

“We urge the two governments to come back to the negotiation table,” said Zarit.

SOURCE: CBC.ca

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