VOA’s Michael Bowman and Ira Mellman contributed to this report.
China says it is imposing tariffs on $60 billion worth of imports from the United States, retaliating after President Donald Trump boosted taxes on $200 billion worth of Chinese goods sent to the United States and moved to impose duties on another $300 billion of Chinese exports.
The Chinese finance ministry said Monday its new 5% to 25% tax would be imposed June 1 and affect 5,140 U.S. products exported to China. Beijing said its response was targeting “U.S. unilateralism and trade protectionism.”
“China will never succumb to foreign pressure,” the foreign ministry said. “We are determined and capable of safeguarding our legitimate rights and interests. We still hope that the U.S. will meet us half way.”
The new Chinese taxes came hours after Trump, on Twitter, urged China not to strike back, claiming “China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!”
But later, Trump said, “Tens of billions of dollars are flowing into our coffers” from the tariffs the U.S. has imposed on China.
The escalation of the tit-for-tat tariff increases had an immediate effect on the U.S. stock market, with the key Dow Jones Industrial Average plunging more than 2% in afternoon trading in New York.
The Chinese announcement came after the world’s two biggest economies ended their latest trade talks Friday in Washington without reaching a deal.
Two U.S. lawmakers voiced support for Trump’s trade fight with China, but with reservations.
Republican Sen. Roy Blunt told VOA, “If there’s a trade fight worth having, it’s a trade fight with China. They have not been fair traders.” But he said “there is no doubt” that diminished sales of farm products to China have hurt his home state of Missouri and other parts of the agrarian Midwest U.S.
Democratic Sen. Chris Van Hollen of Maryland said, “There’s no doubt that we need to challenge China to change a lot of its trade practices and its domestic business practices. For example, they’ve been stealing U.S. secrets for a long time. They have these rules that force U.S. companies to transfer technology. So we’ve we’ve got to confront China on that.”
“The question is what’s the smartest, most effective way to do it,” Van Hollen said. “And while I support some of the president’s strategy, I think some of it’s misguided. Obviously, Americans and American consumers are paying more and more by the day. So, it’s important that we address the fundamental issues in China’s economy.”
“It’s not clear to me that the president’s policies are addressing that, but we’ll see. I see a tariff-only strategy; I don’t see a more comprehensive strategy towards China. I’m not saying that tariffs can’t be part of something, but they cannot be the only tool in your tool box,” he said.
Analyst David Lampton, a fellow at the Stanford Asia Pacific Research Center in Palo Alto, California, said he sees the U.S. and China as competing to be more than just a dominant economic force.
“It includes a mounting arms race and includes diplomatic competition around the world, with China operating in Latin America and Venezuela and so forth, Middle East, in places where we’ve traditionally seen ourselves as dominant,” Lampton said. “And of course we’re operating on China’s periphery and we’re in Vietnam, trying to keep the Philippines in the U.S. column so to speak.”
‘Both sides will suffer’
Chief White House economic adviser Larry Kudlow told Fox News Sunday that “both sides will suffer” from the escalating trade war.
Trump claimed in another tweet, “Their (sic) is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today.” But Kudlow acknowledged, “In fact, both sides will pay. Both sides will pay in these things.”
The U.S. leader has claimed that the Chinese government unfairly subsidizes Chinese companies and steals intellectual property from U.S. firms to manufacture its own products.
Kudlow said that in the U.S. “maybe the toughest burdens” are on farmers who sell soybeans, corn and wheat to China. But he said the Trump administration has “helped them before on lost exports” with $12 billion in past subsidies and that “we’ll do it again if we have to and if the numbers show that out.” Trump has said he will ask Congress to approve another $15 billion in farm subsidies to offset lost sales to China.
Trump on Friday more than doubled tariffs on $200 billion of Chinese goods, boosting the rate from 10% to 25%, while also moving to impose tariffs on an additional $300 billion of Chinese products, although Kudlow said it could take months for the full effect of the tariffs to be felt. China had previously imposed taxes on $110 billion of American products before Monday’s tariff increase.
Despite the break-off in trade talks Friday, Kudlow said, “We were moving well, constructive talks and I still think that’s the case. We’re going to continue the talks as the president suggested.”
Trump said he will meet with Chinese President Xi Jinping to discuss trade issues at the G20 summit in Japan at the end of June.
The United States has claimed China steals technology and forces U.S. companies to divulge trade secrets it uses in its own production of advanced technology products.
On Saturday, Trump suggested China could be waiting to see if he wins reelection next year, but said Beijing would be “much worse” off during a second term of his in the White House.
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