2018/04/02

Will Trade War Escalate? ( China's New Tariff Plan )

China is moving forward with its plan to counter President Donald Trump's new tariffs on steel and aluminum, levying duties, heightening fears of a potential trade war between the world's two largest economies.


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In a statement on Sunday, the Chinese government said it would impose the retaliatory tariffs on 128 products, according to an informal translation.
China will impose a 15 percent tariff increase on goods including
American fruit and nuts and add a 25 percent tariff on pork, recycled aluminum and other goods, the government said.

The move to impose the duties comes just over a week after the Chinese Commerce ministry had announced it was considering tariffs on the goods. Just over a week later, those tariffs are taking effect.

The move is expected to lead to escalating tensions between the two large trading nations, leading many to worry that American farmers will be casualties in a tit-for-tat trade war.

The U.S. shipped more than $1 billion of pork products to China last year, making it the No. 3 destination for exports after Japan and Mexico. The U.S. was China’s top supplier of apples, cherries, walnuts and almonds.
Beijing argued in the statement Sunday that it would be imposing the duties "in order to safeguard China's interests and balance the losses caused by" the steel and aluminum tariffs, which took effect late last month.

It will move forward with the retaliatory measures under the World Trade Organization’s safeguards agreement, which allows a country, after a period of consultation, to put in place tariffs to compensate for another country’s export restrictions.

While the Trump administration has said the steel and aluminum tariffs are necessary to protect national security, Beijing rejected that argument in its statement and said they ran afoul of WTO rules.

China's responses, meanwhile, are "legitimate measures ... to use the rules of the World Trade Organization and safeguard its interests," the statement said.

More tariffs between the two countries are possible in the near future. In March, Trump unveiled another set of tariffs, which specifically target some $60 billion in Chinese exports in response to what the White House has described as policies that force American tech companies to cough up intellectual property in order to
access the Chinese market.

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