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Sunday 31 May 2020

Donald Trump imposes fresh US tariffs on Chinese goods worth $34 billion

Beijing accused Washington of launching 'the largest trade war in economic history' and vowed to take the case to the World Trade Organisation

Washington: US President Donald Trump unleashed a fresh wave of a trade war with its largest trade partner China by imposing punishing tariffs on $34 billion worth of Chinese imports which took effect on Friday.
It marked the start of President Donald Trump’s trade war with the largest American trading partner and intensifying the anxieties of a global industry.

 

Beijing said it was “forced to take necessary countermeasures” after Trump imposed 25% duties on about $34 billion in Chinese machinery, electronics and high-tech equipment including autos, computer hard drives and LEDs.

China was expected to respond dollar-for-dollar but did not immediately release details of the countermeasures, which were expected mainly to target agricultural products in a bid to hurt Trump supporters.

Beijing accused Washington of launching “the largest trade war in economic history” and vowed to take the case to the World Trade Organisation.

But it could just be the opening skirmishes in the war, as Trump has vowed to impose tariffs on as much as $450 billion in Chinese goods, the vast majority of imports.

The arrival of the long-threatened tariffs marked the failure of months of dialogue between the world’s two largest economies and came amid hand-wringing from industry leaders who fear shrinking markets, higher prices and slower growth.

US officials accuse China of building that country’s emerging industrial dominance by stealing the “crown jewels” of American technological know-how through cyber-theft, forced transfers of intellectual property, State-sponsored corporate acquisitions and other underhand practices.

The US trade deficit in goods with China ballooned to a record $375.2 billion last year, further stoking Trump’s ire.

But it remained to be seen whether the American president would carry out recent threats to respond to any Chinese retaliation with maximum pressure —raising US duties on Chinese goods in increments of USD 200 billion until virtually all the goods America buys from its largest trading partner are subject to duties.

As the tariffs’ start approached at midnight, the US central bank warned the impending trade battle was beginning to darken the otherwise blue skies of the robust American economy, now starting its 10th year of recovery.

The start of the trade war likely confirms the widening rupture between Trump and his own Republican Party, a traditional champion of free trade and big business whose members, while critical, have so-far shrunk from curtailing the White House’s trade powers.

But, with the GOP facing strong political headwinds ahead of November’s mid-term elections, China’s countermeasures left both Trump and Republican lawmakers increasingly vulnerable to voters who appear likely to boost the fortunes of opposition Democrats.

The powerful US Chamber of Commerce, a principal corporate lobby, said this week that retaliation from China, Canada, Mexico, the European Union and others against Trump’s tariffs was already affecting $75 billion in US exports— much of this from States that had narrowly supported Trump in 2016’s presidential elections.

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