International desk, Apr 03: Beijing on Monday slapped additional tariffs of up to 25 percent on about $3 billion worth of U.S. products in response to new U.S. duties on aluminum and steel imports.U.S. producers, Canada and South Korea have been granted exemptions from the aluminum and steel duties, but not China, a relatively small supplier to the United States.
The Chinese tariffs are widely regarded as modest in size. They are seen as a warning shot to the U.S. administration, which will this week unveil a list of Chinese high-tech imports targeted for U.S. duties.
The White House has criticised China after it imposed retaliatory tariffs against the US on a range of goods including pork and wine.
Beijing has introduced duties on 128 American imports following President Donald Trump’s decision to slap tariffs on steel and aluminium.
China said the move was intended to safeguard its interests and balance losses caused by the new tariffs.
US stocks plunged and Asian shares opened lower as trade war fears mount.
On Wall Street, the S&P 500 Index crashed 2.2%, while the Dow Jones Industrial Average dropped 1.9%.
In Asia, Japan’s Nikkei 225 opened down about 1.5% on Tuesday.
In its statement about the tariffs, the White House accused Beijing of “distorting global markets”.
“China’s subsidisation and continued overcapacity is the root cause of the steel crises,” spokeswoman Lindsay Walters said.
“Instead of targeting fairly traded US exports, China needs to stop its unfair trading practices which are harming US national security and distorting global markets.”
The back-and-forth reflects rising tensions between the US and China, which President Trump has described as an “economic enemy”.
U.S. industry has expressed concerns that China could further retaliate with punitive levies on major products such as aircraft, soybeans and autos.
“China does not like trade wars, but being on the side of justice, China has no choice but to enter a war to end a war,” Wang Hailou, a researcher at the Chinese commerce ministry’s research center, wrote in the commentary.
Beijing has repeatedly said it does not fear a trade war with the United States, but it has also urged Washington to come to the table and resolve their trade differences.
“It would be beneficial for all if (China’s) friendly overtures were accepted by Washington. However, at the moment it seems intent on turning a deaf ear to any suggestion that they each make concessions to reach an amicable agreement,” according to an editorial in China Daily.
The US has taken two major steps recently that have triggered tension with China.
On 8 March, it announced global steel and aluminium tariffs saying the measures were necessary to protect US producers and critical to national security. (Certain allies such as Canada, Mexico and the European Union, are in line for exemptions, pending talks.)
China challenged the US use of national security to justify the tariffs and announced retaliatory tariffs on $3bn (£2.1bn) worth of US products.
Those tariffs went into effect on Monday, targeting US goods including frozen pork, nuts, fresh and dried fruit, ginseng and wine.