Responding to the latest increase in duties aimed in a dispute over China’s technology policy by the United States President Donald Trump, China announced increasing of tariff on $60 billion of U.S. products.
The Chinese measure was announced soon after an American business group issued a warning about a potential “downward spiral” appeared certain after the imposition of tariffs on $200 billion of Chinese goods by the Trump administration.
The statement from the Chinese Finance Ministry said that the government was pressing ahead and implementing the announced plan of the enhancement of tariffs on 5,207 types of US goods by 10 per cent and 5 per cent. coffee, honey and industrial chemicals were included in a list released last month.
The finance the ministry said on its website that the objective of enhancement of tariffs was to curb “trade friction” and done to reduce the “unilateralism and protectionism of the United States.” The ministry also called for a “pragmatic dialogue” to “jointly safeguard the principle of free trade and the multilateral trading system.”
In the latest round of tariffs imposed by the Trump administration, 5000 Chinese made products have been targeted to be taxed at 10 per cent from Monday which would be enhanced to 25 per cent from January 1 next year.
Trump’s increase “brings new uncertainty to the consultations”, said an earlier statement from the Chinese commerce ministry. However nothing has been said about whether the talks can be boycotted by China.
The US alleges that the plans for the development of Chinese industry which includes the “Made in China 2025” plans are founded on stolen technology and they also violate Beijing’s market-opening commitments and has the potential to erode American industrial leadership.
Chinese market barriers and industrial policy have been the bone of contention for long for American companies and some of China’s other trading partners including the European Union and Japan. However, very few agree to the tactics of tariff adopted by Trump and have warned that such trade disputes can depress global economic growth and violate international trade regulation.
Washington is underestimating Beijing’s determination to fight back, warned the American Chamber of Commerce in China.
“The downward spiral that we have previously warned about now seems certain to materialize,” the chamber chairman, William Zarit, said in a statement.
In July, 25 per cent tariffs were imposed by Trump on $50 billion of Chinese products which was retaliated by China in by imposing similar tariffs on similar value of American imports into the country.
“Contrary to views in Washington, China can and will dig its heels in and we are not optimistic about the prospect for a resolution in the short term,” said Zarit of the American Chamber of Commerce. “No one will emerge victorious from this counter-productive cycle.”
The chamber appealed to both governments for “results-oriented negotiations.”
(Adapted from TheHindu.com)