Trade war begins as China strikes back against US over tariffs

US tariffs on $34bn worth of Chinese imports take effect as China imposes countermeasures against American goods.

    Trump has threatened to impose up to $500bn in additional tariffs if Beijing does not give in to his demands [File: AP]
    Trump has threatened to impose up to $500bn in additional tariffs if Beijing does not give in to his demands [File: AP]

    A trade war broke out between the world's two largest economies, after China struck back on Friday with its own set of tariffs on American goods, shortly after the US levied $34bn of duties on Chinese imports.

    Washington increased tariffs at 12:01am Eastern time (04:01 GMT) on $34bn worth of Chinese imports, a first step in what could become an accelerating series of tariffs.

    Just hours after the US tariffs took effect, China's Foreign Ministry spokesman Lu Kang told reporters in Beijing that China has also imposed its own countermeasures, and that it took effect at 12:01pm Beijing time (04:01 GMT).  

    Earlier, China's Ministry of Commerce said it would be "forced to make a necessary counterattack".

    Are U.S. and China on the brink of a trade war? - Inside Story

    Speaking from the Bulgarian capital, Sofia, on Friday, Chinese Premier Li Keqiang also weighed in on the trade dispute, saying that no one will emerge a winner from a trade war.    

    Beijing had earlier released a target list of $34bn worth of imported US goods, including lobsters, soybeans, electric cars and other agricultural products, that also faced 25 percent tariffs.

    "China promised to not fire the first shot, but to defend national core interests and the interests of the people it has no choice but to strike back as necessary," the Ministry of Commerce said in a statement.

    The ministry called the US actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history."

    China's state news website, Xinhua, described the US action against Beijing on Friday as typical of a "trade bully". 

    US Customs and Border Protection officials were due to collect 25 percent duties on a range of products, starting on Friday, including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

    The list avoids direct tariffs on consumer goods such as mobile phones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories.

    Russia imposes extra import duties

    Following China's decision, Russia also increased duties on goods imported from the US.

    Russian Prime Minister Dmitry Medvedev signed the measure on Friday, adding 25 to 40 percent extra duties on products ranging from fibre optics to equipment for several industries, including road construction, oil and gas, mining and metal processing.

    Moscow said the increased duties were intended to offset the damages Russian companies have suffered as a result the US metal tariffs.

    Russian economy ministry officials said the country has the right to impose additional duties in the future to compensate for the losses.

    More tariffs expected 

    Al Jazeera's Rob McBride, reporting from Beijing, said that while the $34bn in goods "doesn't equate to a huge amount given the size of the world's biggest economies, it is more the gesture and what it might lead to." 

    "The US has said that it is prepared to put tariffs on hundreds of billions of dollars of more goods and China has said it will match that," he added. 

    US President Donald Trump told reporters on Thursday that US tariffs on an additional $16bn in Chinese goods are set to take effect in two weeks.

    In 2017, the US exported more than $1.3bn worth of seafood to China [File: AP]

    Trump also said the US is ready to target an additional $200bn in Chinese imports - and then $300bn more - if Beijing does not yield to US demands and continues to retaliate.

    That would bring the total of targeted Chinese goods to potentially $550bn - more than the $506bn in goods that China shipped to the US last year.

    The Trump administration contends China has deployed predatory tactics in a push to overtake US technological dominance. These tactics include cyber-theft and requiring American companies to hand over technology in exchange for access to China's market.

    'Don't doubt Beijing's resolve'

    The official newspaper China Daily accused the Trump administration of "behaving like a gang of hoodlums" who could do damage to the global economy unless other countries stop them. 

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    "There should be no doubting Beijing's resolve," the newspaper said.

    The American Chamber of Commerce in China appealed to both sides to negotiate a settlement.

    "There are no winners in a trade war," said the chamber's chairman, William Zarit, in a statement. It said US companies want fairer treatment but will be hurt by US-Chinese tensions.

    "We urge the two governments to come back to the negotiation table," said Zarit.

    Meanwhile, Einar Tangen, an economic adviser to the Chinese government, told Al Jazeera that the US president is to blame for starting the trade war.

    "He is taking a very sharp blow trying to take China out of the global supply chain," Tangen said, even as he noted that despite Trump's efforts, the supply chain "wont move to the US".

    "This is not a win-win scenario, this is a lose-lose scenario."

    SOURCE: Al Jazeera and news agencies


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