China’s $US60 billion tariff threat to US goods

CHINA has announced a $US60 billion ($A81 billion) list of US goods including coffee, honey and industrial chemicals for retaliation if Washington goes ahead with its latest tariff threat.

The Finance Ministry accused the Trump administration of damaging the global economy after it proposed increasing duties on $US200 billion ($A271 billion) of Chinese goods in the second round of a dispute over technology.

“China is forced to take countermeasures,” said a ministry statement. It said the retaliatory duties of 25 per cent, 20 per cent, 10 per cent or 5 per cent on 5207 products will be imposed “if the US side persists in putting its tariff measures into effect.”

Washington imposed 25 per cent duties on $34 billion ($A46 billion) of Chinese goods on July 6 in response to complaints Beijing steals or pressures companies to hand over technology. Beijing retaliated by imposing similar charges on the same amount of US products.

Earlier Friday, a Chinese foreign ministry spokesman called on Washington to “come to its senses” and settle the dispute.

Chinese leaders have offered to narrow their politically sensitive trade surplus with the United States by purchasing more American goods. But they have rejected changing technology development plans they see as a path to prosperity and global influence.

The escalating dispute, with no settlement in sight, has fuelled fears it might chill global trade and economic growth.

Friday’s threat targeting a smaller amount of US goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.

China’s imports from the United States last year totalled $US153.9 billion ($208 billion). After the earlier action against $34 billion ($A46 billion) of US goods, that left about $US120 billion ($A162 billion) available for retaliation.

The highest penalties in Friday’s list would be imposed on honey, vegetables, mushrooms and chemicals, targeting farming and mining areas that supported President Donald Trump in the 2016 election.

The list included products as varied as snow blowers and 3-D printers, suggesting Chinese authorities were struggling to find enough imports their own economy can do without.

Beijing’s earlier round of tariffs appeared designed to minimise the impact on the Chinese economy by targeting soybeans, whiskey and other goods available from Brazil, Australia and other suppliers.

Trump earlier proposed 10 per cent tariffs on an additional $US200 billion ($271 billion) of Chinese imports. He told trade officials this week to consider raising that to 25 per cent.

Chinese authorities warned earlier that if the dispute escalated, they would adopt unspecified “comprehensive measures.”

That prompted concern among American companies that retaliation might expand to disrupting their operations in China.

The United States and China have the world’s biggest trading relationship but official ties are increasingly strained over complaints Beijing’s technology development tactics hurt American companies.

Trump’s tariffs target goods the White House says benefit from industrial policies such as “Made in China 2025,” which calls for developing Chinese competitors in robotic, artificial intelligence and other fields.

China’s trading partners complain those might violate its market-opening pledges by subsidising or shielding Chinese companies from competition.

The dispute is part of broader US complaints about global trading conditions that have prompted Trump to raise duties on steel, aluminium, washing machines or solar panels from Canada, Europe, Japan and South Korea.

The foreign ministry spokesman appealed to Washington to negotiate but could not confirm reports the two sides were setting up talks.

“We urge the United States to come to its senses, correct its erroneous acts and create the necessary condition for a proper settlement as soon as possible,” spokesman Geng Shuang said.