China targets $3 billion of U.S. goods in tariff spat

Lester Mason
April 16, 2018

Exports contracted 2.7 percent from a year earlier to US$174.1 billion, down from the 24.4 percent growth for January and February, customs data showed yesterday.

China lashed back within hours, matching the American tariffs with plans to tax $50 billion of US products, targeting products they can get elsewhere like soybeans and small aircraft. Trump's publicly stated premise that China needs to be slapped with tariffs on its steel and aluminum exports to the US because it is destroying these USA industries is a fallacy.

Sharply criticising protectionist policies of western countries, India on Saturday offered to export soybean and sugar to China amid the tariff spat between Beijing and Washington and sought major Chinese investments specially in India's housing-for-all project.

China's first-quarter exports to the US rose 14.8 percent from a year earlier, despite a 5.6 percent drop in March. Numerous US commodities that China is targeting, such as nuts, fruits, and aluminum scrap, can most likely be quickly substituted by products from other countries. China's strategic tariffs on USA goods is meant to make Trump supporters in red states clearly aware that the president's actions have a direct negative effect on them, and that their support of the president will have financial repercussions.

"That might be very useful", Kumar said referring to the US-China trade war.

However, Xuzhou, an industrial city in eastern China's province of Jiangsu, was also on the list of the 10 smoggiest cities in March and during the first quarter, a sign that China's smog is shifting from its northern heartlands as a result of the crackdown.

"In Qatar, the way they document a deal is very basic", said Sammy Fang, another partner at DLA Piper, who is an expert in China-related disputes and compliance.

Beijing claims 90 per cent of the South China Sea, a maritime region believed to hold a wealth of untapped oil and gas reserves and through which roughly $4.5 trillion of ship-borne trade passes every year. The global trade balance often slips into deficit for one month early each year as factories restock following the Lunar New Year holiday.

A USTR statement said possible measures include a 25 percent tariff on Chinese-made aerospace, computer and information technology and machinery but gave no details.

Imports of commodities continued to lead the way in March as manufacturers replenished inventories ahead of a seasonal pick-up in demand. Analysts said that was in part triggered by a new consumption tax regulation as crude oil prices have risen. Electing Democrats will only enable China to achieve this goal faster.

But the sudden spike in trade tensions with the United States is clouding the outlook for both China's "old economy" heavy industries and "new economy" tech firms alike.

China´s trade surplus with the United States surged by a fifth in the first three months of the year with Beijing calling on Washington on Friday to be patient as tensions between the economic superpowers simmer.

US President Donald Trump's tariffs on Chinese goods have roused nationalist sentiment in the world's second largest economy, where consumers have a long track record of spurning foreign products when political nerves are frayed.

According to U.S. media reports, President Trump made the move to "punish" the People's Republic of China for what he called the theft of American technology.

Hi-tech products have been among its fastest growing export segments. "The Office of the U. S. Trade Representative [USTR] reports that China's theft of American intellectual property costs us as much as $600 billion a year", says Weber.

Other reports by Iphone Fresh

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