U.S. slaps tariffs on another $16 billion in Chinese goods as trade negotiations continue

AFP-JIJI, AP

The United States on Thursday imposed steep import tariffs on another $16 billion in Chinese goods over what Washington has called the rampant theft of American technology, even as trade negotiators were in talks to avert further confrontations.

The latest action completes the first round of $50 billion in products that President Donald Trump targeted, with Beijing striking back at American products dollar-for-dollar at each step.

China “firmly opposes the tariffs and has no choice but to continue to make the necessary counterattacks,” the commerce ministry said in a statement. Beijing hit back with tariffs on an equal amount of U.S. goods.

The 25 percent duties, previously announced, apply to $16 billion of goods from each side, including automobiles and metal scrap from the United States and Chinese-made factory machinery and electronic components.

In the first round of tariff hikes, U.S. President Donald Trump imposed 25 percent duties on $34 billion of Chinese imports on July 6. Beijing responded with similar penalties on the same amount of American goods.

The Chinese government criticized Thursday’s U.S. increase as a violation of World Trade Organization rules and said it would file a legal challenge.

Beijing has rejected U.S. demands to scale back plans for state-led technology development that its trading partners say violate its market-opening commitments and American officials worry might erode the United States’ industrial leadership.

This all comes as the world’s two largest economies were holding their first formal discussion since June on the spiraling and multifaceted trade war.

Trump has pushed aggressive trade actions to lower the U.S. trade deficit, which he equates with theft from Americans. But U.S. trading partners have retaliated aggressively, which is hurting American farmers, manufacturers and consumers.

U.S. businesses have become increasingly concerned about the tariffs, which are raising prices for manufacturers and could hurt the economy, although the prospect of a negotiated solution buoyed Wall Street this week.

However, Federal Reserve officials have warned that “an escalation in international trade disputes was a potentially consequential downside risk for real activity,” according to the minutes of the July 31 to Aug. 1 policy meeting.

A large-scale and prolonged dispute likely would adversely impact business sentiment, investment spending and employment, the officials warned, as well as boost prices, which would “reduce the purchasing power of U.S. households.”

Still pending are the possibility of new duties on another $200 billion in Chinese goods, which are the subject of public hearings this week, as well as Trump’s proposed 25 percent taxes on all auto imports to protect the U.S. industry.

But Commerce Secretary Wilbur Ross said China will not be able to continue to retaliate at the same pace as the United States.

“Naturally they’ll retaliate a little bit. But at the end of the day, we have many more bullets than they do. They know it,” Ross said on CNBC. “We have a much stronger economy than they have, they know that too.”

Trump, who has threatened to target all $500 billion in goods the U.S. imports from China, has made that same point, noting that Beijing cannot continue to retaliate in kind since it imports less than $200 billion a year in American goods.

U.S. Treasury’s David Malpass, undersecretary for international affairs, is leading two days of talks, which began Wednesday, with China’s Vice Commerce Minister Wang Shouwen and Chinese Vice Finance Minister Liao Min. The talks were to continue Thursday morning, but the Treasury has not specified what topics are being discussed.

Trump said earlier this week that he was not expecting much from the dialogue.

“We are a country that has been ripped off by anybody and we are not going to be ripped off anymore,” Trump said at a campaign rally in West Virginia on Tuesday.

“It has to be a two-way street. We only have one-way streets not only with China but everybody.”

Thousands of large and small companies and industry groups have urged the Trump administration to reconsider the tariffs, which some say could put them out of business.

But so far the Trump administration has largely been deaf to the complaints, as only a handful of product lines have been shielded from the punitive duties.

The administration was already forced to announce a $12 billion aid program for farmers hurt by the trade wars, as U.S. agricultural products, like soybeans, were an easy target for China and others