The United States on Tuesday announced a proposed list of products imported from China that could be subject to additional tariffs of 25% amounting to $50 billion.
The US tariff unveiling, representing about $50 billion of estimated 2018 imports and aimed at dealing a setback to China’s efforts to upgrade its manufacturing base, drew an immediate condemnation from Beijing, along with a threat of retaliatory action, news outlets reported.
The US trade representative said the proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China's industrial plans while minimizing the impact on the US economy.
Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics and machinery.
The list covers approximately 1,300 separate tariff lines and will undergo further review in a public notice and comment process, including a hearing. After completion of this process, the USTR will issue a final determination on the products subject to the additional duties.
China had said Tuesday that its door for talks with the Trump administration is open but if there is a trade war it will "fight till the end". The comments came a day after Beijing imposed tariffs on 128 American products as retaliation against US duties on steel and aluminum.
China had imposed tariffs on 128 US imports worth $3 billion, including meat, fruit and pork, as retaliation against taxes approved by US President Donald Trump on imported steel and aluminum.
Last month, Trump announced that the US will impose tariffs on approximately $50 billion worth of Chinese imports and take other actions in response to China's policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.
These policies bolster China's stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as "Made in China 2025", PTI said.
Trump raked up the issue of trade gap with China once again, saying the US cannot afford to have a $500 billion a year trade deficit with Beijing. "We have a problem with China. They've created a trade deficit, and I really blame our representatives and, frankly, our preceding presidents for this. It's not something we can live with," Trump told reporters during a media interaction with visiting Baltic leaders.
US Industries Oppose Move
However several industry groups were quick to oppose Trump's proposal to impose tariff on some 1,300 selected Chinese products.
"The Trump administration is right to push back against China's abuse of economic and trade policy, but imposing tariffs on producer goods will inadvertently hurt Americans through reduced capital investment and lower productivity growth.
"The list of tariffs that the USTR has proposed today would hurt companies in the US by raising the prices and reducing consumption of the capital equipment they rely on to produce their goods and services," Information Technology and Innovation Foundation President Robert D. Atkinson said.
Attempts to roll back Chinese innovation mercantilism should be more carefully targeted than this. The focus should be on things that will create the most leverage over China without raising prices and dampening investment in the kinds of machinery, equipment, and other technology that drives innovation and productivity across the economy, he said.
Counter-Punch to Trump
China condemned the United States on Wednesday and vowed imminent countermeasures in the escalating trade dispute, Reuters said.
Beijing has also raised tariffs on $50 billion of US goods including soybeans, chemicals, aircraft and automobiles in retaliation.
The commerce ministry on Wednesday criticized the US move as a violation of global trade rules and said China was acting to protect its "legitimate rights and interests". It said a 25% tariff would be imposed and the date the charges will take effect would be announced later.
Meanwhile, the Chinese Embassy in the United States said that it strongly condemns and firmly opposes new tariffs. "The Chinese side strongly condemns and firmly opposes the unfounded Section 301 investigation and the proposed list of products and tariff increases based on the investigation," the embassy said in a statement, shortly after Washington unveiled the list.
The list was authorized by the USTR's office, which in August 2017 initiated an investigation under the Section 301 of the Trade Act of 1974 to probe alleged Chinese intellectual property and technology transfer practices.
China has repeatedly said that Section 301 investigation is a unilateral move that violates World Trade Organization rules. "Such unilateralistic and protectionist action has gravely violated fundamental principles and values of the WTO. It serves neither China's interest, nor US interest, even less, the interest of the global economy," the embassy said.
