WASHINGTON: The White House has criticised China after it imposed retaliatory tariffs against the US on a range of goods including pork and wine.
Beijing has introduced duties of up to 25% on 128 American imports following President Donald Trump’s decision to slap tariffs on steel and aluminium.
China said the move was intended to safeguard its interests and balance losses caused by the new tariffs. US stocks plunged and Asian shares opened lower as trade war fears mount.
On Wall Street, the S&P 500 Index crashed 2.2%, while the Dow Jones Industrial Average dropped 1.9%. In Asia, Japan’s Nikkei 225 opened down about 1.5% on Tuesday.
In its statement about the tariffs, the White House accused Beijing of “distorting global markets”. “China’s subsidisation and continued overcapacity is the root cause of the steel crises,” spokeswoman Lindsay Walters said.
“Instead of targeting fairly traded US exports, China needs to stop its unfair trading practices which are harming US national security and distorting global markets.”
The back-and-forth reflects rising tensions between the US and China, which President Trump has described as an “economic enemy”.
China’s theft of foreign intellectual property is what sparked all this in the first place, according to Washington. If international companies want to operate in China they must hand over their intellectual property for the privilege, thus delivering the likes of German high-speed rail technology into the hands of Chinese engineers.
Yet now that China’s retaliatory tariffs have kicked in, there are also those sympathetic with that argument who are worried that launching a potential tariff war is not the way to fix the problem. Naturally others say China has been getting away with this for years and tough measures were needed in order to force change.
There is also the overall imbalance in US-China trade but a large Chinese surplus, of course, means it is potentially much more exposed during a trade war than America. For this reason Beijing will want to negotiate a way out of this escalating tariff showdown.
Its first set of tariffs are relatively mild but they come in response to the first round of US tariffs and a second has already been announced. There are plenty more American companies to be hit and other nations, especially those in Europe and Asia, could soon find themselves dragged into this conflict.
