U.S. to Put Tariffs on Chinese Goods, Drawing Vow of Retaliation as Trade Fight Widens
By Ana Swanson
WASHINGTON — The Trump administration said on Friday that it would move ahead with imposing tariffs on $50 billion of Chinese products, drawing a vow of retaliation from Beijing and escalating a trade war between the world’s two largest economies.
President Trump’s decision to move forward with the penalties is the latest twist by a White House that has vacillated between taking a tough stance on Chinese trade practices and declaring that the trade war was “on hold.” It comes after the president ignited trade spats on numerous fronts, including levying tariffs on metal imported from allies and adversaries around the globe and sparring with Canada and Mexico over the future of the North American Free Trade Agreement.
Tariffs on roughly $34 billion of Chinese products — drawn from a list that the administration published in April and vetted through a series of hearings in mid-May — will go into effect on July 6, the office of the United States Trade Representative said. The administration is also proposing a new list of tariffs on roughly $16 billion of products, which it said would undergo further review, including public hearings.
China will hit back by imposing its own tariffs, the country’s Ministry of Commerce said in a release. The statement was not specific about which goods would be targeted, but the list is likely to include agricultural products and manufactured goods, people briefed on the plans have said.
“We will immediately introduce taxation measures of the same scale and with the same intensity,” the statement said. “All of the economic and trade achievements previously negotiated by the two parties will also be invalid.”
In a statement Mr. Trump said that trade between the countries had been “very unfair, for a very long time,” and that the United States would pursue additional tariffs if China retaliates.
The U.S. tariffs will fall on 1,102 categories of Chinese goods, a list that generally focuses on industrial sectors that relate to the country’s Made in China 2025 plan for dominating high-tech industries, like aerospace, automobiles, industrial machinery, information technology and robotics, the administration said. Goods commonly purchased by American consumers, like mobile phones and televisions, won’t be taxed.
The White House says its measures are necessary to reset the trade relationship with China, a country they accuse of gaming economic rules and costing millions of American jobs.
But the prospect of a trade war between the two economies has sparked concern from businesses, many of which depend on access to China’s market, as well as investors and consumer groups. Economists say the levies will both drive up prices for American consumers purchasing products at retail stores and for businesses that depend on China for parts used to make other goods in the United States. That would potentially dampen economic growth that has been stoked by the administration’s tax cuts.
“Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers and ranchers,” said Thomas J. Donohue, the president of the U.S. Chamber of Commerce. “This is not the right approach.”
The plan to proceed with tariffs has split the president’s closest advisers, some who believe they are necessary measures to force China to reform, and others who fear the fallout from a trade war and have been pushing for a negotiated solution.
For weeks, the administration appeared to be shying away from an open confrontation as China assisted the White House in preparing for a summit with North Korea, while Treasury Secretary Steven Mnuchin and other advisers said talks were progressing toward a deal. China offered the United States a package of purchases of agricultural and energy products that would reach nearly $70 billion in the first year, though that was conditional on the United States lifting its threat of tariffs.
At the personal request of Chinese President Xi Jinping, the Trump administration altered a penalty to extend a lifeline for ZTE, a Chinese telecom firm that had been bankrupted by American sanctions.
But the announcement that the White House would pursue tariffs on Friday appears to be a victory for the more hard-line faction of the Trump administration, including trade representative Robert E. Lighthizer and trade adviser Peter Navarro, who balked when Mr. Mnuchin declared last month that tariffs would be suspended while negotiations continued.
Tensions could escalate further in the coming weeks. The White House is formulating a plan for restricting Chinese investments in the United States and putting stricter limitations on the types of advanced technology that can be exported to the country. It has said those restrictions will go into effect shortly after they are announced by June 30.
Follow Ana Swanson on Twitter: @AnaSwanson.
Cao Li contributed reported from Hong Kong. Elsie Chen contributed research from Beijing.
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