China plans tariffs on $60 billion of US goods in latest trade salvo

FILE PHOTO: Shipping containers, including one labelled "China Shipping," are stacked at the Paul W. Conley Container Terminal in Boston, Massachusetts, US - REUTERS

BEIJING/SINGAPORE (Reuters): China proposed retaliatory tariffs on $ 60 billion worth of US goods ranging from liquefied natural gas (LNG) to some aircrafts on Friday as a senior Chinese diplomat cast doubt on prospects of talks with Washington to solve their bitter trade conflict.

The Trump administration tightened pressure for trade concessions from Beijing this week by proposing a higher 25% tariff on $ 200 billion worth of Chinese imports. China vowed to retaliate while also urging Washington to act rationally and return to talks to resolve the dispute.

The United States and China implemented tariffs on $ 34 billion worth of each others’ goods in July. Washington is expected to soon implement tariffs on an additional $ 16 billion of Chinese goods, which China has already announced it will match immediately.

China has now either imposed or proposed tariffs on $ 110 billion of US goods, representing the vast majority of China’s annual imports of American products. Last year, China imported about $ 130 billion of US goods.

China’s Finance Ministry unveiled new sets of additional tariffs on 5,207 goods imported from the United States, with the extra levies ranging from 5% to 25%.

Timing will depend on the actions of the United States, the Chinese Commerce Ministry said in a separate statement.

“The US side has repeatedly escalated the situation against the interests of both enterprises and consumers,” it said. “China has to take necessary countermeasures to defend its dignity and the interests of its people, free trade and the multilateral system.” A top adviser to US President Donald Trump said the newly proposed tariffs were not as severe as the White House had been bracing for, and he warned China not to test Trump’s resolve.

 “They better not underestimate the President,” White House National Economic Council Director Larry Kudlow said in an interview on Fox Business Network. “He is going to stand tough.”

The United States alleges that China steals US corporate secrets and wants it to stop doing so, and is also seeking to get Beijing to abandon plans to boost its high-tech industries at America’s expense. Washington also wants China to stop subsidising Chinese companies with cheap loans, claiming that this allows them to compete unfairly.

Trump has said he is determined to reduce the large US trade deficit with China.

The US President has accused China and others of exploiting the United States in global trade, and has demanded Beijing make a host of concessions to avoid the new duties on $ 200 billion of Chinese goods, which could be imposed in the weeks after a comment period closes on 5 September.

Beijing says the United States is deliberately creating the trade conflict, using bullying tactics, and ignoring international negotiating norms so that it can stop the rise of China as a competitor on the world stage.

The rising tensions have weighed on Chinese stock and currency markets, with the yuan falling against the dollar.

“Instead of retaliating, China should address the long-standing concerns about its unfair trading practices,” White House spokeswoman Sarah Sanders said in an emailed statement.

The two countries have not had formal trade talks since early June.

Still, two senior diplomats met earlier on Friday on the sidelines of a regional summit in Singapore.

China is willing to resolve differences with the United States “on the basis of an equal footing and mutual respect,” China’s top diplomat said after meeting US Secretary of State Mike Pompeo.

“He (Pompeo) was accommodating on this as a direction, and said that he does not want current frictions to continue,” said State Councillor Wang Yi, who is also China’s Foreign Minister.

Answering a reporter’s question about what was specifically said on trade, Wang said: “We did not speak in such details.”

“How can talks take place under this pressure?” he added.

However, speaking to reporters at the White House, Kudlow said there had been some communication on trade “at the highest level” in recent days.

White House spokeswoman Lindsay Walters also said there had been “high-level discussions on multiple occasions in the past few months”, and Washington remained open to further talks with China.