Trade Dispute between US, China Rises

Glen Norman
June 17, 2018

The trade war between the two countries escalated after US President Donald Trump on Friday announced 25 per cent tariff on $ 50 billion worth of Chinese goods as he also went on to accuse China of intellectual property theft and unfair trade practices.

China, in return, said it would impose an additional 25 percent tariff on certain US products worth $50 billion.

President Trump unveiled an initial list of strategically important goods that would be subject to a 25% tariff effective July 6, and China's Commerce Ministry responded with its own list of United States imports targeting soybeans, aircraft, autos and chemicals.

The media response came as China announced tariffs on $34bn of USA goods including agricultural products, cars and marine products which will also take effect from 6 July.

China will impose duties with "equal scale, equal intensity" on imports from the USA and all the consensus the two sides reached earlier will lose effect, the Commerce Ministry said in a statement on its website yesterday.


The American Apparel & Footwear Association - while praising the Trump administration for dropping an earlier plan to place levies on key equipment and machinery used by the industry - said Friday that China's retaliatory measures could harm American farmers and textile manufacturers and add costs to the industry's supply chain. Although Pompeo was in Beijing to debrief the Chinese on the Singapore summit, the trade friction was never far from the surface.

On Friday, the USA announced additional tariffs of 25 per cent on Chinese imports worth approximately United States dollars 50 billion.

The list of products issued by United States trade representative covers 1,102 separate USA tariff lines valued at approximately $50 billion in 2018 trade values.

Trump has triggered a trade war with Canada, Mexico and the European Union over steel and aluminum and has threatened to impose duties on European cars. Officials said the list of products does not include common consumer products, such as cell phones and TVs. The automaker sold 41,040 units in 2018, the Envision's first full year in the USA market.

"Made in China 2025" is an important economic initiative undertaken by the Chinese government to promote the development of key industries, particularly in the tech sector, over the next seven years.


China's finance ministry said it would respond with tariffs "of the same scale and strength". 818 items making up $34 billion of the tally are affected in a first wave of notices with majority relating to industrial durable goods such as aircraft turbines, isotopes, centrifuges. "We can't do that", Trump said later Friday morning on "Fox and Friends" broadcasting from the White House North Lawn.

American auto giant Ford has sold 338,386 cars thus far in China in 2018, about one-third the number in the United States, and had welcomed a Chinese plan to lower tariffs on auto imports.

The moves increase the trade dispute between the world's two largest economies.

But at least initially, the new tariffs will not cover the full US$50 billion that Trump announced Friday.


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