China today issued a $50 billion dollar list of U.S. goods, including soybeans and small aircraft, for possible tariff hikes.
The fiscal measure derived from an escalating technology dispute between Beijing and Washington, raising speculations that the furore between the two countries could set back the global economic recovery.
The country’s tax agency gave no date for the 25 per cent increase to take effect but stated that it would depend on what President Donald Trump does about U.S. plans to raise duties on a similar amount of Chinese goods.
Beijing’s list of 106 products included, the biggest U.S. exports to China, reflecting its intense sensitivity to the dispute over American complaints that it pressures foreign companies to hand over technology.
The clash reflects the tension between Trump’s promises to narrow a U.S. trade deficit with China that stood at $375.2 billion last year and the ruling Communist Party’s development ambitions.
Regulators use access to China’s vast market as leverage to press foreign automakers and other companies to help create or improve industries and technology.
It would be recalled that a list the U.S. issued Tuesday of products subject to tariff hikes included aerospace, telecoms and machinery, striking at high-tech industries seen by China’s leaders as the key to its economic future.
China said it would immediately challenge the U.S. move in the World Trade Organisation.
A Deputy Commerce Minister, Wang Shouwen, said at a news conference: “It must be said, we have been forced into taking this action. Our action is restrained.”
A Deputy Finance Minister, Zhu Guangyao, appealed to Washington to “work in a constructive manner” and avoid hurting both countries.
Zhu warned against expecting Beijing to back down.
“Pressure from the outside will only urge and encourage the Chinese people to work even harder,” said Zhu at the news conference.
Companies and economists have expressed concern that improved global economic activity might sputter if other governments were prompted to raise their own import barriers.
Weiliang Chang of Mizuho Bank was quoted as saying in a report that the dispute “may compel countries to pick sides.”
Also, the chairman of the American Chamber of Commerce in China, William Zarit, said: “U.S. companies at this point would like to see robust communication between the US government and the Chinese government and serious negotiation on both sides, hopefully to avoid a trade war.
“I can only hope that we solve our differences as soon as possible to avoid damage to the U.S. economy, Chinese economy and to U.S. companies”, Zarit added.