05 April, 2018
China said it would levy an additional 25% tariff on imports of 106 USA products including soybeans, automobiles, chemicals and aircraft, in response to proposed American duties on its high-tech goods.
The Chinese government added that the exact date of the introduction of Beijing's trade measures will depend on when USA authorities announce the introduction of their duties on Chinese goods.
Last month, Trump announced that the USA will impose tariffs on approximately United States dollars 50 billion worth of Chinese imports and take other actions in response to China's policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.
The Office of the US Trade Representative (USTR) published a proposed list of products imported from China that could be subject to additional tariffs.
These policies bolster China's stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as "Made in China 2025".
One of the notable casualties of the Chinese tariffs is a United States company that's owned by China.
The Semiconductor Industry Association says US companies have about half of global semiconductor market share, constituting the United States' fourth ranked export behind aircraft, refined oil and automobiles.
The announcement came after the USA published a list of $50-billion worth of Chinese imports that could have tariffs imposed on them. The U.S. government is inviting public comment on its trade sanctions through May 11 and will hold a hearing on the plan May 15.
As for the scuffle with China, Kotok said he's hopeful that much of this is bluster from the Trump administration.
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The announcement triggered further heavy selling in global stock markets and commodities, with United States stock futures sliding 1.5%, soybean futures plunging 3.7% and the dollar briefly extending early losses. Known as the Made in China 2025 program, the plan specifies efforts to build up cutting-edge industries like robotics, aerospace and electric cars.
"We have been saying that China wouldn't start a trade war", a Chinese Foreign Ministry spokesperson said in Beijing. That excludes high-end Boeing Co. jetliners such as the 747 and 777, leaving Beijing high-profile targets for possible future conflicts.
Then, on Tuesday, the White House went ahead with tariffs that target manufacturing technology, arguing that Chinese trade practices have unfairly hurt US business.
Also on the list were American beef, whisky, passenger vehicles and industrial chemicals.
As the Trump administration has ramped up trade actions against China, policymakers in Beijing have emphasized they do not want a trade war but will not back down in the face of USA pressure. But the decision indicates China is willing to match USA threats, despite the risk.
David Podruzny, vice-president business and economics at the association, said the impact will take awhile because most of the production is under contract. Reflecting global concerns of a coming trade war, Wall Street took a steep dive Wednesday morning, with the Dow plummeting 500 points.
It further said that the United States' action went against the Chinese interests, and was against the spirit of free trade, espoused by the World Trade Organisation (WTO).
Soy Canada executive director Ron Davidson says the 25 per cent levy on USA goods could create some opportunities for Canadian exporters, but also force Canada to defend sales to 69 other countries.