World

China hikes tariffs on 128 US products as trade war sparks fly

China raises tariffs by up to 25% on 128 US products in escalating trade tensions

BEIJING: China has increased tariffs by up to 25 per cent on 128 US products including frozen pork, wine and certain fruits and nuts.

It escalates a spat between the world's biggest economies in response to US duties on imports of aluminium and steel.

The tariffs, effective yesterday, were announced on Sunday by China's Finance Ministry.

It matched a list of potential tariffs on up to US$3 billion (S$3.93 billion) in US goods published by China on March 23.

Soon after the announcement, an editorial in the widely read Chinese tabloid Global Times warned that if the US had thought China would not retaliate or would take only symbolic counter-measures, it can now "say goodbye to that delusion".

"Even though China and the US have not publicly said they are in a trade war, the sparks of such a war have already started to fly," the editorial said.

China's Ministry of Commerce said it was suspending its obligations to the World Trade Organisation (WTO) to reduce tariffs on 120 US goods, including fruit and ethanol.

Tariffs on those products will be raised by an extra 15 per cent. Eight other products, including pork and scrap aluminium, will be subject to additional tariffs of 25 per cent, it said.

"China's suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China's interests," the Chinese Finance Ministry said.

The retaliatory tariffs come amid escalating trade tensions between Beijing and Washington, which have rocked global financial markets in the past week as investors fear a full-blown trade spat between the two countries will be damaging for world growth.

US President Donald Trump is separately preparing to impose tariffs of more than US$50 billion on Chinese goods intended to punish Beijing over US accusations that China systematically misappropriated American intellectual property - allegations that Beijing denies.

China has repeatedly promised to open its economy further, but many foreign companies continue to complain of unfair treatment.

Yesterday morning, the Chinese Commerce Ministry said the US had "seriously violated" the principles of non-discrimination enshrined in WTO rules and damaged China's interests.

It added that differences between the two countries should be resolved through dialogue and negotiation.

US technology industry officials said they expected the Trump administration's list to target products that benefit from Beijing's Made in China 2025 programme, which aims to upgrade the country's domestic manufacturing base with more advanced products.

The state-led programme targets 10 strategic industries for replacing imports with Chinese-made products.

They are: Advanced information technology, robotics, aircraft, shipbuilding and marine engineering, advanced rail equipment, new energy vehicles, electrical generation equipment, agricultural machinery, pharmaceuticals and advanced materials. - REUTERS

BUSINESS & FINANCE