China has hit back against US President Donald Donald Trump’s latest round of tariffs by hiking import duties on some American agricultural and food products by 10 to 15 per cent.
Citing national security concerns, Beijing also imposed export and investment restrictions on 25 United States companies, banning imports of gene sequencing machines from medical equipment firm Illumina.
The moves came immediately after the White House announced an additional 10 per cent tariff on all Chinese imports, on top of the 10 per cent hike Mr Trump imposed last month. Washington said it added the tariffs because China was not doing enough to stop the export to the US of chemicals used to make the drug fentanyl.
Mr Trump also announced a 25 per cent tariff on all imports from Canada and Mexico, demanding that those two countries tighten border security to help the US to deal with its drug abuse problem. And the US president accused China and Japan of putting the US at an unfair disadvantage by weakening their currencies, although neither country’s central bank has been taking such action recently.
“The US’s unilateral tariffs measures seriously violate World Trade Organization rules and undermine the basis for economic and trade co-operation between China and the US,” China’s commerce ministry said in a statement on Tuesday.
China’s retaliatory measures include a 15 per cent tariff on American chicken, wheat, corn and cotton and a 10 per cent levy on soybean, pork, beef, fruit and milk products. Nearly half of US soybean exports go to China, which also accounts for 30 per cent of American cotton exports.
Although the Chinese countermeasures will have a big impact on some agricultural sectors that can be politically sensitive, they affect only a fraction of US exports to China.
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Given that the tariffs mr Trump announced apply to all goods imported from China, Beijing’s response suggests that Xi Jinping wishes to avoid a swift escalation of the trade war between the world’s two biggest economies.
The tariff announcements coincided with the start on Tuesday of China’s annual legislative meeting, known as the Two Sessions, in the Great Hall of the People on Tiananmen Square. The parallel meetings of the Chinese People’s Political Consultative Conference (CPPCC) and the National People’s Congress (NPC) which is China’s highest legislative body, will continue for a week.
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Premier Li Qiang will on Wednesday deliver the annual report on the work of the government and announce the 2025 targets for economic growth, unemployment, deficits and inflation. Xi has identified weak domestic demand as a threat to national security and NPC spokesman Lou Qinjian on Tuesday acknowledged the headwinds faced by the economy.
“Undoubtedly, the adverse impacts brought the external environment have deepened and China’s economy still faces some difficulties and challenges,” he said. “But it’s more important to note that China’s economy has a solid foundation, many advantages, strong resilience and vast potential.”
Mr Lou called for closer economic co-operation between China and the EU, which put a Comprehensive Agreement on Investment (CAI) on ice four years ago. And he criticised Trump’s use of tariffs, saying that trade disputes should be settled at the World Trade Organisation.
“By imposing unilateral tariffs, the US has violated WTO rules and disrupted the security and stability of the global industrial and supply chains,” he said.
“We hope the US can work in the same direction as China and find a solution through equal-footed consultation. China is also ready to work more closely with other countries to safeguard the hard-earned multilateral trading system, oppose unilateralism and protectionism, and advance a universally beneficial and inclusive economic globalisation.”