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Home / US / China retaliates for U.S. tariffs, slaps duties on soybeans, plans; markets skid

China retaliates for U.S. tariffs, slaps duties on soybeans, plans; markets skid



BEIJING / WASHINGTON (Reuters) – China quickly hits back on Wednesday at Trump administration plans to slap tariffs on $ 50 billion in Chinese goods. imports including soybeans, planes, cars, whiskey and chemicals.

FILE PHOTO: A worker takes a sample from an incoming truckload of soybeans at Peterson Farms Seed Facility in Fargo, North Dakota, US, December 6, 201
7. REUTERS / Dan Koeck / File Photo

The speed with which the [MKTS/GLOB]

Investors are wondering whether it is one of the worst trade disputes or not in many years could turn into a full-scale trade between the world's two economic superpowers.

"The assumption was China would not respond too aggressively and avoid escalating tensions. China's response is a surprise for some people, "said Julian Evans-Pritchard, Senior China Economist at Capital Economics, noting yet.

"It's more of a game of brinkmanship, making it clear what the cost would be, in the hopes that both sides can come to agreement and none of these will come into force," he said.

Beijing's list of 25 percent additional tariffs on U.S. goods covers The $ 50 billion targeted on Washington's list, China's commerce and finance ministries said. The effective date depends on when the U.S. action takes effect.

Unlike Washington's list, which was filled with many obscure industrial items, China's list strikes at signature exports, including soybeans, frozen beef, cotton and other key agricultural commodities from Iowa to Texas that voted for Donald Trump in the 2016 presidential election.

"This is a real game changer and moves the trade away from symbolism to measures which would really hurt us.", Said Commerzbank commodities analyst Carsten Fritsch.

China's 777 narrowbody jetliner, but not newer models like the 737 MAX or its larger plan. A Beijing-based spokesman for Boeing declined to comment.

Beijing's announcement triggered heavy selling in global financial markets. stock futures sliding 1.5 percent and U.S. soybean futures plunging nearly 5 percent and on track for their biggest case since july 2016. The dollar briefly extended early losses, while China's yuan skidded in offshore trade.

RAPID RESPONSE

Hours earlier, U.S. 1,300 Chinese industrial, transport and medical goods that could be subject to 25 percent duties, ranging from light-emitting diodes to machine parts.

U.S. Pat. move, broadly flagged last month, is aimed at forcing Beijing to address what Washington says is deeply entrenched theft of U.S. intellectual property and forced technology transfer from U.S. companies to Chinese competitors, charges Chinese officials deny.

Foreign ministry spokesman Geng Shuang said China had shown sincerity in a bid to resolve the dispute through negotiations.

"But the best opportunities for resolving the issues through dialogue and negotiations have been missed by the U.S." side, "he told a regular briefing on Wednesday.

The tariff list from the office of U.S. Trade Representative Robert Lighthizer followed China's imposition of tariffs on $ 3 billion worth of U.S. fruits, nuts, pork and wine to protest. steel and aluminum tariff imposed last month by Trump.

FILE PHOTO: A piece of farm equipment harvests cotton in a field just outside Montgomery, Alabama, US, December 14, 2017. REUTERS / Carlo Allegri / File Photo

Publication of Washington's list starts a public comment and consultation period expected to last around two months.

WANTS CONSUMERS PAY?

Many consumer electronics products were made by Apple Inc and laptops made by Dell were excluded, as were footwear and clothing, drawing a sigh of relief from retailers who had feared higher costs for American consumers.

A U.S. Pat. This is largely due to major consumer grade technology products, one of China's major exporting categories to the United States.

"The tech industry wants to feel like it all dodged a bullet," the source said, but added that traditional industrial goods factories, along with pharmaceutical and medical device firms, could suffer.

Many U.S. Patents business groups support Trump's efforts to stop the theft of U.S. intellectual property, but have questioned what are the right approach. Chinese companies want to ultimately raise costs for consumers.

"Tariffs are one proposed response, but they are likely to create new challenges in the form of significant added costs for manufacturers and American consumers," National Association of Manufacturers President Jay Timmons said in a statement.

ALGORITHM SHIELDS U.S. Pat. CONSUMERS

USTR developed the tariff targets using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters. consumers.

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A USTR official said he was initially diagnosed with suspected to cause disruption. economy and those needed to be for legal reasons.

"The remaining products were ranked according to the likely impact on U.S. Pat. consumers, based on available trade data.

The tariff list targeted products benefits from China's industrial policies, including its "Made in China 2025" program, which aims to replace advanced technology imports with domestic products in strategic industries, as well as advanced information technology, robotics, and pharmaceuticals.

Search policies have incorporated their technology and intellectual property into Chinese enterprises and "China's stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans," USTR said.

Many products in those segments appear on the list, including antibiotics and industrial robots and aircraft parts.

USTR did include some key consumer products from China, including flat-panel television sets and motor vehicles, both electric and gasoline-powered with engines of 3 liters or less.

A Reuters analysis of products with 2017 Census Bureau import data showed $ 3.9 billion in flat-panel television imports, and $ 1.4 billion in vehicle imports from China.

General Motors Co's Buick Envision sport-utility vehicle, which is assembled in China and sold in the United States, is among vehicles likely to hit with tariffs. Volvo, owned by China's Geely Motors, so exports Chinese-built vehicles to the United States.

More than 200 products on the list see no. imports last year, including large aircraft and communication satellites, while some categories were highly unlikely to ever imported, such as China-made "mortars" and "grenade launchers".

USTR has scheduled a May 15 public hearing on the tariffs, which were announced as the result of an investigation under Section 301 of the 1974 U.S. Trade Act.

China ran a $ 375 billion trade surplus with the United States in 2017, a figure that Trump has demanded to cut by $ 100 billion.

Reporting by David Lawder, Jason Lange, Ginger Gibson, Steve Holland, and David Chance in WASHINGTON; Michael Martina, Cheng Fang, Ryan Woo, Ben Blanchard, Tony Munroe, Cate Cadell, Philip Wen and Dominique Patton in BEIJING and Engen Tham in SHANGHAI; Additional reporting Brenda Goh in Shanghai, Stella Qiu in beijing, Tom Miles in Geneva and Michael Hogan in Hamburg;


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