The United States and China have launched what Beijing called the “biggest trade war in economic history,” imposing tariffs on billions of dollars of each other’s goods in a potentially harmful fight over technology that could soon escalate.
The Trump administration is confronting China over tactics it says include stealing technology and pressuring foreign companies to hand it over as the price of admission to China’s vast market. The administration contends that U.S. industrial leadership will be eroded by Beijing’s strong-armed drive to achieve technological supremacy in such fields as robotics, biotech and artificial intelligence.
The administration imposed 25 percent duties on $34 billion of imports from China, the first in a series of potential increases. The tariffs target Chinese industrial goods, not consumer products, in an attempt to limit the impact on U.S. households. On the Chinese side, the Communist Party newspaper People’s Daily said tariffs were imposed on a list of American goods that include soybeans, pork and electric vehicles. U.S. soybean farmers have been particularly concerned. The price of soybeans has plunged 17 percent in the past month on tariff fears.
President Donald Trump has warned that the U.S. is ready to target an additional $200 billion in Chinese imports — and then $300 billion more — if Beijing refuses to yield to U.S. demands and continues to retaliate. If his administration went ahead with that threat, it would raise the total of targeted Chinese goods to potentially $550 billion — more than the $506 billion that China actually shipped to the United States last year.
Even if the Trump administration doesn’t follow through on that threat, more individuals could be affected over time by the tariffs that kicked in Friday. Some American companies that rely on Chinese-made machinery or parts, for example, will eventually have to pass along at least some of their higher costs to customers. Others will likely decide to hold back on hiring.
The U.S. trade war is the most consequential trade conflict the administration has provoked. But it’s hardly the only one. It has also applied tariffs on imported steel and aluminum from allies like Canada, Mexico and the European Union. The 28-country EU bloc has responded with import taxes on $3.25 billion of U.S. goods. In the meantime, the Trump administration has threatened to abandon the North American Free Trade Agreement with Canada and Mexico. Trump has also spoken about slapping tariffs on imported cars, trucks and auto parts, which General Motors has warned could hurt the U.S. auto industry and drive up car prices.
This article provided by NewsEdge.