The trade war between Trump and China is taking shape. After the US administration last night unveiled plans for a 25% tariff on a grand total of 1,333 goods, China has hit back.
China has said it will introduce additional tariffs of 25% on 106 US goods. The total list covers imports that were work around $50bn to the US economy last year, and many think the move is retaliation by what Washington views as decades of state-sanctioned intellectual property theft by Beijing.
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Some types of aircraft
Cigars and tobacco
Some types of beef
Some plastic products
Some types of wheat
Certain electric vehicles
The escalating situation represents is the most aggressive trade war between China and the US since former President Richard Nixon eased diplomatic relations in the 1970s.
China recently hit the US products with $3 billion worth of tariffs, in response to the steel and aluminium tariffs Trump announced in early March. These included duties on US pork, steel pipes and dried fruit.
After the US list of goods to be subject to tariffs was published last night China said it would not let this most recent slight go unpunished and the Chinese commerce ministry released a statement which said:
China strongly condemns and firmly opposes the US tariff proposals and is ready to take counter measures on US products. We have the confidence and ability to respond to any US trade protectionist measures.
The increasingly tit-for-tat trade tensions are likely to rattle stock markets and may increase consumer prices in both countries.
Trump maintains that the measures are not part of plans for ever-increasing retaliation between the two states. Yesterday he suggested that his new tariffs are designed to pressure Beijing into negotiating more transparently with the US over trade.
We’ll be working with China, we’ll be negotiating with China…We intend to get along with China, but we have to do something very substantial.
US Trade Representative Robert Lighthizer suggested that the list seemed designed on the basis of what would have the biggest economic impact on China at the smallest additional cost for US consumers.
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However the tariff announcement is still likely trigger lobbying from corporate groups who fear their interests may be affected.
Targeted items include large amounts of military equipment, including artillery weapons such as guns, howitzers and mortars, rocket launchers, grenades, and torpedo and missile parts.
The list also features many agricultural and manufacturing tools including industrial robots and medical machinery such as defibrillators and hearing aids. Consumer goods like clothes and shoes were not included.
The full list of items the US will be taxing can be viewed here.