The escalating protectionism between the two largest economies edged towards a full-on trade war Wednesday as Beijing proposed tariffs on American goods worth $50 billion a year.
The move came in retaliation for similar duties announced by Washington just hours earlier.
China’s Commerce Ministry announced that 106 U.S. products, including soybeans, automobiles, chemicals, whisky, and cigars, would be hit with a 25 percent tariff. The levies will come into effect if the U.S. follows through on its threat to impose new duties on Chinese-made goods.
China’s targeting of $50 billion in goods is exactly the same amount as a list of 1,300 Chinese industrial, transport and medical exports that Washington said Tuesday could be hit with 25 percent duties.
The tariffs are part of a push by Washington to pressure Beijing over what it says is a culture of intellectual property theft of American-made technology.
Chinese Foreign Ministry spokesperson Geng Shuang told reporters that Beijing urged the U.S. to drop its plan for the tariffs, and engage in dialogue instead.
“Those who attempt to make China surrender through pressure or intimidation have never succeeded before, and will not succeed now,” he said, adding that “the best opportunities for resolving the issues through dialogue and negotiations have been repeatedly missed by the U.S. side.”
China’s deputy finance minister Zhu Guangyao told reporters Wednesday that Beijing did not want a trade war, which would be a “lose-lose” for both parties. But he warned that Beijing wouldn’t back down over the issue. “Pressure from the outside will only urge and encourage the Chinese people to work even harder,” he said.
The U.S. tariffs are especially sensitive for Beijing as they target high-tech industries which China sees as critical to the future of its economy.
The quick response to Washington’s latest move, coming less than 11 hours after U.S. tariffs were announced, fuelled fears among investors that the dispute will escalate into a full-blown trade war that will hamper international trade and affect the global economic recovery. Markets slumped Wednesday in the wake of the news from Beijing.
The China director of the U.S. Soybean Export Council, Zhang Xiaoping, told Reuters that Beijing’s announcement of tariffs on the product was “regrettable” and would not solve the $375 billion trade deficit between the countries. Soybeans are America’s top U.S. agricultural export to China, the world’s largest soybean consumer, and were worth about $14 billion in 2016. U.S. soybean futures fell following the announcement.
Cover image: A China supporter smokes a cigar during a rally in support of Chinese President Xi Jinping during his visit in Prague, Czech Republic, Tuesday, March 29, 2016. (AP Photo/Petr David Josek)