China Plans Tariffs on $3 billion of U.S. Exports

The trade conflict between China and the U.S. escalated, with Beijing announcing its first retaliation against metals levies hours after President Donald Trump outlined fresh tariffs on $50 billion of Chinese imports and pledged there’s more on the way. China plans for reciprocal tariffs on $3 billion of U.S. exports to China, which include fruit, wine, ethanol, pork, recycled aluminum and steel pipes.’

The Chinese embassy in Washington, DC said in a href=”http://www.china-embassy.org/eng/zmgxss/t1544748.htm” target=”_blank”>statement. “China does not want a trade war with anyone. But China is not afraid of and will not recoil from a trade war,” it said

Bearing in mind the principles of mutual respect and win-win cooperation, China has demonstrated sincerity in making reasonable suggestions to the U.S., and has made great efforts to address the current trade imbalance between China and the U.S. China does not want a trade war with anyone. But China is not afraid of and will not recoil from a trade war. China is confident and capable of facing any challenge. If a trade war were initiated by the U.S., China would fight to the end to defend its own legitimate interests with all necessary measures.

“China’s response is surprisingly modest in light of the U.S. actions, suggesting there could be a good deal more to come,” said Stephen Roach, a former non-executive chairman for Morgan Stanley in Asia and now a senior fellow at Yale University to Bloomberg. “As America’s third largest and most rapidly growing export market and as the largest foreign owner of Treasuries, China has considerably more leverage over the U.S. than Washington politicians care to admit.”

The economic impact on both China and the U.S. will be determined by what form the tariffs end up taking,” said Hannah Anderson, a global markets analyst at J.P. Morgan Asset Management to WSJ. Ms. Anderson expects the effects to be felt more keenly in the U.S., with consumer and producer prices rising, than in China, which depends less on the U.S. market than in previous years.

$506 billion that China exported to the United States drove around 2.5 percent of its total gross domestic product, and the $50-60 billion targeted by the U.S. tariffs contributed just around 0.25 percent. China is unlikely to respond until Washington acts but might launch an investigation of imports of U.S. corn and soybeans and airplanes “as a warning shot”.