Beijing warns of "necessary countermeasures" as Washington announces 10 percent tariffs on Chinese goods, upping the ante in its trade dispute with the Asian economic giant.

Last week, Washington imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China.
Last week, Washington imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China. (AFP)

The Trump administration raised the stakes in its trade dispute with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports.

The news sent stocks tumbling, with China's markets leading the declines, and prompted a senior Chinese commerce ministry official to warn that the United States was harming the global trade order.

US officials released a list of 6,031 Chinese product lines the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. 

The tariffs will not be imposed until after a two-month period of public comment on the proposed list.

TRT World's Kevin McAleese reports from Washington DC. 

US invokes legitimate concerns 

It also includes consumer goods ranging from car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

"For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition," US Trade Representative Robert Lighthizer said in announcing the proposed tariffs.

"Rather than address our legitimate concerns, China has begun to retaliate against US products ... There is no justification for such action," he said in a statement.

Investors fear an escalating trade war between the world's two biggest economies could hit global growth.
Investors fear an escalating trade war between the world's two biggest economies could hit global growth. (Reuters Archive)

China says it will respond

Beijing on Wednesday vowed to take "countermeasures" after the announcement.

"The Chinese government as always will have no choice but to take the necessary countermeasures," said China's ministry of commerce in a statement, without elaborating further.

The ministry said it "solemnly protests" the latest tariff list published by Washington, calling it "totally unacceptable."

"This type of irrational behavior is unpopular," the statement said, adding China would tack on the case to its suit against the US at the WTO.

Last week, Washington imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China.

Investors fear an escalating trade war between the world's two biggest economies could hit global growth.

In financial markets, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5 percent, while the main indexes in Hong Kong and Shanghai fell more than 2 percent.

S&P 500 and Dow futures dropped around 1 percent, pointing to a weak opening on Wall Street later on Wednesday.

US targets $500 billion worth exports

President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods – roughly the total amount of US imports from China last year.

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.

Some US business groups and senior lawmakers were quick to criticise the move.

Farmer Terry Davidson walks through his soy fields July 6, 2018, in Harvard, Illinois, the same day China imposed retaliatory tariffs aimed at the US soybean market.
Farmer Terry Davidson walks through his soy fields July 6, 2018, in Harvard, Illinois, the same day China imposed retaliatory tariffs aimed at the US soybean market. (AFP)

'Tariffs are taxes'

Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump's Republican Party, said the announcement "appears reckless and is not a targeted approach."

The US Chamber of Commerce has supported Trump’s domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump's aggressive tariff policies.

“Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every-day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers," a Chamber spokeswoman said.

Fighting fire with fire 

In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said at a forum in Beijing that the latest US proposals interfered with the globalisation of the world economy and that China's support for a multilateral trade system would not change.

Although it was not a direct reaction to the new move from Trump's administration, the official English-language newspaper China Daily said in an editorial that Beijing had to stand up to Washington.

"China has no option but to fight fire with fire. It has to resolutely fight back while taking proper measures to help minimise the cost to domestic enterprises and further open up its economy to global investors," it said.

Source: Reuters