US President Donald Trump is to impose 25% tariffs on $50bn worth of Chinese goods, accusing Beijing of intellectual copyright theft. Tariffs that affect more than 800 products worth $34bn in annual trade are due to come into effect on 6 July. The White House said it would consult on tariffs on the other $16bn of products, and would apply these later. China retaliated, saying it will impose an additional 25% tariff on 659 US goods worth $50bn. The US had earlier warned that it will impose even more tariffs should China retaliate.
Mr Trump said the tariffs were “essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.” The Chinese product lines that have been hit range from aircraft tyres to turbines and commercial dishwashers. In response, China announced tariffs on $34bn of US goods including agricultural products, cars and marine products which will also take effect from 6 July. Tariffs on other US goods will be announced at a later date, the Xinhua news agency reported.
“If the US takes unilateral and protectionist measures that harm Chinese interests, we will respond immediately by taking the necessary decisions to safeguard our legitimate rights and interests,” Chinese foreign ministry spokesman Geng Shuang said earlier on Friday. All trade talks between China and the US would be void if Washington imposed trade sanctions, he added. Stock markets dropped in Europe and the US after the announcements with investors concerned about a possible trade war.
The US wants China to stop practices that allegedly encourage transfer of intellectual property – design and product ideas to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market. However many economists and businesses in the US say the tariffs are likely to hurt some of the sectors the administration is trying to protect, which depend on China for parts or assembly.
Farmers are also worried about harm caused by retaliation.The plans have elicited a mixed political reaction, drawing praise from Democrats and opposition from Republicans, who typically favour free trade policies.