Tit-for-tat tariff sparks trade war between US and China

RSTV Bureau
US President Donald Trump with Chinese President Xi Jinping on November 9, 2017 in Beijing. Photo Courtesy: Twitter/@XHNews

US President Donald Trump with Chinese President Xi Jinping on November 9, 2017 in Beijing. Photo Courtesy: Twitter/@XHNews

In an attempt to hit back at the US, China has unveiled plans to impose higher tariffs on USD 3 billion worth of American goods including pork and pipes in retaliation to US raising tariffs on imports from Beijing. The move will escalate the already tense trade relations between the world’s two biggest economies.

China’s decision comes after US President Donald Trump imposed USD 60 billion of tariffs on Chinese imports to punish the country for its “unfair” seizure of American intellectual property.

China’s measures suspending tariff concessions will target 128 US products including pork, wines and seamless steel tubes, the Ministry of Commerce said in a statement.

According to the Chinese ministry, the measures will include a 15-per cent tariff on products including fruits, nuts, wines and seamless steel tubes, and a 25-per cent tariff on pork and recycled aluminium products.

China plans to implement the measures in two stages. In the first stage, the 15-per cent tariff will be imposed if the two countries could not reach an agreement on trade issues within scheduled time. In the second stage, the 25-per cent import tax will be imposed after evaluating the impact caused by the US policies, state-run Xinhua news agency quoted the ministry as saying.

The move was aimed at countering US decision to impose 25 per cent tariffs on steel imports and 10 per cent on aluminium, with initial exemptions for Canada and Mexico.

On Thursday, the Ministry said it would “take all necessary measures” to defend its rights and interests, responding to media reports that the United States will soon release results of a Section 301 investigation against China.

“China will absolutely not sit back watching its rights and interests be damaged,” said an unnamed official in charge of the ministry’s treaty and law department.

In August 2017, the US initiated an investigation into Chinese intellectual property and technology transfers under Section 301 of the Trade Act of 1974.

(With inputs from agencies)