US tariff war draws China's retaliation

China hit back quickly on Wednesday against the Trump administration's plans to slap tariffs on $50 billion in Chinese goods, retaliating with a list of similar duties on key US imports including soybeans, planes, cars, beef and chemicals.

The speed with which the trade struggle between Washington and Beijing is ratcheting up – China took less than 11 hours to respond with its own measures – led to a sharp selloff in global stock markets and commodities.

US President Donald Trump denied that the tit-for-tat moves amounted to a trade war between the world's two economic superpowers.

"We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the US," Trump wrote in a post on Twitter early on Wednesday.

Investors were wondering, nonetheless, how far one of the worst trade disputes in many years could escalate.

"The assumption was China would not respond too aggressively and avoid escalating tensions. China's response is a surprise for some people," said Julian Evans-Pritchard, Senior China Economist at Capital Economics, noting that neither side had yet called for enforcement of the tariffs.

US-made goods that appear to face added tariffs in China, based on an analysis of Beijing's list, include Tesla electric cars, Ford's Lincoln auto models, Gulfstream jets made by General Dynamics and Brown-Forman Corp's Jack Daniel's whiskey.

Unlike Washington's list, which was filled with many obscure industrial items, China's list strikes at signature US exports, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states from Iowa to Texas that voted for Donald Trump in the 2016 presidential election.

While Washington targeted products that benefit from Chinese industrial policy, including its "Made in China 2025" initiative to replace advanced technology imports with domestic products in strategic industries such as advanced IT and robotics, Beijing's appears aimed at inflicting political damage.

Beijing's list of 25 percent additional tariffs on US goods covers 106 items with a trade value matching the $50 billion targeted on Washington's list, China's commerce and finance ministries said.

"This is a real game changer and moves the trade dispute away from symbolism to measures which would really hurt US agricultural exports," said Commerzbank commodities analyst Carsten Fritsch.

China's tariff list covers aircraft that would likely include older models such as Boeing Co's workhorse 737 narrow body jet, but not newer models like the 737 MAX or its larger planes.

Beijing's announcement triggered heavy selling in global financial markets, with US stock futures sliding 1.5 percent and US soybean futures plunging nearly 5 percent and on track for their biggest fall since July 2016. The dollar briefly extended early losses, while China's yuan skidded in offshore trade.

Hours earlier, the US government unveiled a detailed breakdown of some 1,300 Chinese industrial, transport and medical goods that could be subject to 25 percent duties, ranging from light-emitting diodes to machine parts.

The US move, broadly flagged last month, is aimed at forcing Beijing to address what Washington says is deeply entrenched theft of US intellectual property and forced technology transfer from US companies to Chinese competitors, charges Chinese officials deny.

Foreign ministry spokesman Geng Shuang said China had shown sincerity in wanting to resolve the dispute through negotiations.

The tariff list from the office of US Trade Representative Robert Lighthizer followed China's imposition of tariffs on $3 billion worth of US fruits, nuts, pork and wine to protest at new US steel and aluminum tariffs imposed last month by Trump.

(Source: Reuters)

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk