China Retaliates With Tariffs On US Soybeans, Others


Wang Shouwen, a vice minister of Commerce, said Wednesday at a briefing with reporters that Beijing doesn't want a trade war but will fight one if forced to.

Forecasters say the immediate impact should be limited, but investors worry the global recovery might be set back if it prompts other governments to raise import barriers.

Chinese authorities had warned the U.S. it would respond with the "same strength" after the United States issued its list in response to China's intellectual property practices, the USTR said.

"U.S. companies at this point would like to see robust communication between the USA government and the Chinese government and serious negotiation on both sides, hopefully to avoid a trade war", said the chairman of the American Chamber of Commerce in China, William Zarit.

Activity in Japan's service sector also grew at its slowest pace in 17 months last month, British shop prices dropped at the fastest pace in more than a year while Australian February building approvals fell 6.2%. China said the timing would be announced separately. In an email on Wednesday, Paul Burke, North Asia Regional Director of the U.S. Soybean Export Council, said duties on soybeans will hurt both U.S. farmers as well as Chinese soy processing, animal producers and consumers.

Experts said Beijing's latest announcement could be an effort to push the United States into negotiating a deal to defuse the trade spat.

The measures, which has seen gold climb 0.8 per cent, are the latest move in an increasingly tense relationship between China and the USA, and one that is increasingly being viewed as the start of a trade war.

The date of implementation will depend on when the USA government imposes the tariffs on Chinese products, it said.

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Such policies coerce American companies into transferring their technology and intellectual property to Chinese enterprises and "bolster China's stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans", USTR said. That's an average tariff increase on overall imports from China of just 2.5 per cent, he said.

The current US ambassador to China, Terry Branstad, is the former governor of Iowa, a state that could be hit hard.

The technology investigation was launched under a little-used Cold War era law, Section 301 of the U.S. Trade Act of 1974.

China's commerce ministry listed 106 products that will be targeted by a 25 per cent tariff, and said a date for the implementation of the tariffs would be announced separately. And they say it imposes contract terms that are less favourable than for local technology.

The tariff list from the office of US Trade Representative Robert Lighthizer followed China's imposition of tariffs on $3 billion worth of USA fruits, nuts, pork and wine to protest new US steel and aluminium tariffs imposed last month by Trump.

The White House said the proposed extra tax on the imports was a response to unfair Chinese practices around intellectual property rights.

Soybeans are the U.S. biggest export to China.

If China responds to this latest tariff action on a dollar-for-dollar basis, it could damage more than one-third of total US exports to China and Hong Kong, according to Setser. China said it has its own list of American exports that it will target if the United States goes through with its plan.