In this July 4, 2018, photo, a robot from Chinese search company Baidu welcomes visitors to a developer event in Beijing, China. (AP Photo/Ng Han Guan)

US-China kick off ‘biggest trade war in economic history’

The Trump administration contends China has deployed predatory tactics in a push to overtake U.S. technological dominance.

The United States and China launched what Beijing called the “biggest trade war in economic history” Friday, imposing tariffs on billions of dollars of each other’s goods amid a spiraling dispute over technology.

The Trump administration is confronting China over development tactics it says include stealing technology or pressuring foreign companies to hand it over. American officials worry U.S. industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence.

Washington imposed 25 per cent duties on $34 billion of imports from China, the first in a series of possible increases that President Donald Trump says could affect up to $550 billion of Chinese goods, more than the total amount China exported to the U.S. last year.

The first round targets Chinese industrial goods, not consumer products, in an attempt to limit the impact on U.S. households, but companies that rely on Chinese-made machinery or components may eventually have to pass along increased costs to customers.

The Chinese Foreign Ministry said “retaliatory tariffs” also took effect, but provided no other details. The Communist Party newspaper People’s Daily said tariffs were imposed on a list of goods issued last month that included soybeans, pork and electric vehicles. U.S. soybean farmers have been particularly concerned, and the price of soybeans has plunged 17 per cent over the past month on tariff fears.

Washington has “ignited the biggest trade war in economic history,” said a Commerce Ministry statement.

Related: Trump complains about “STUPID TRADE” with China

Related: Trudeau thanks Canadians for standing up for each other

During an official visit to Bulgaria, China’s No. 2 leader, Premier Li Keqiang, said “no one will win by fighting a trade war, yet China will take countermeasures in the face of unilateral moves.”

Companies worry the dispute could chill global economic growth, but Asian financial markets took Friday’s developments in stride.

Japan’s main stock index, the Nikkei 225, gained 1.1 per cent while the Shanghai Composite Index added 0.5 per cent. Hong Kong’s Hang Seng also rose 0.5 per cent.

The conflict between the world’s two biggest economies reflects chronic tension in their relationship as customers, business partners, and increasingly competitors. It also is rooted in the clash between American notions of free trade and Beijing’s state-led development model.

China’s ruling Communist Party has insisted on making changes at its own pace while sticking to state-directed technology development seen as the path to prosperity and global influence. Beijing has announced reforms this year including ending limits on foreign ownership in its auto industry, but none directly addresses complaints that are fueling its conflict with Washington.

On Thursday, Trump said higher tariffs on an additional $16 billion in Chinese goods were set to take effect in two weeks.

After that, the hostilities could intensify: Trump said Washington is ready to target an additional $200 billion in Chinese imports — and then $300 billion more — if Beijing does not yield.

That would bring the total of targeted Chinese goods to $550 billion — more than the $506 billion in goods that China shipped to the United States last year.

Chinese officials reject accusations they steal or force foreign companies to hand over technology. But rules on auto manufacturing and other industries require companies to work through state-owned partners, obliging them to share know-how with potential competitors.

Other governments express similar complaints toward Beijing, but Washington has alienated potential allies by raising import duties on steel, aluminum and autos from Europe, Canada, Mexico and Japan. Some have responded by hiking their own tariffs on U.S. goods.

Trump’s confrontational outlook applies to other trading partners as well as China, said Tai Hui, chief strategist for JP Morgan Asset Management, in a report.

“This is a potential concern for the outlook of corporate investment and consumption around world,” Hui said.

The official China Daily newspaper accused the Trump administration of “behaving like a gang of hoodlums.” It said they would damage the global economy unless other countries stop them.

“There should be no doubting Beijing’s resolve,” the newspaper said.

Forecasters say global economic growth could be reduced by up to 0.5 percentage points in 2019-20 if both sides wind up raising tariffs on $250 billion of imports.

The American Chamber of Commerce in China appealed to both sides to negotiate.

“There are no winners in a trade war,” the chamber’s chairman, William Zarit, said in a statement. Companies want fairer treatment but will be hurt by U.S.-Chinese tensions, Zarit said. “We urge the two governments to come back to the negotiation table.”

___

Wiseman and Superville reported from Washington. AP Writer Catherine Lucey on Air Force One contributed.

Joe McDonald, Paul Wiseman And Darlene Superville, The Associated Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Jill Carley new vice-principal at Mt. Baker Secondary

Following the announcement of a new principal for Cranbrook’s high school, a… Continue reading

Cranbrook city council approves agreement with RecycleBC for curbside collection

Cranbrook city council has taken another step towards curbside recycling collection, unanimously… Continue reading

Kelowna glider pilot crashes in the Columbia Valley

The Transportation Safety Board is investigating the circumstances of the crash

Cranbrook Pride society organizes different kind of event this year due to COVID-19

The Cranbrook Pride Society had to be creative in planning this year’s… Continue reading

MP Morrison pushes for accountability following federal fiscal update

Kootenay-Columbia parliamentarian says it is time to restart the economy

Sources say Canada, U.S. likely to extend mutual travel ban into late August

Prime Minister Justin Trudeau hinted at the possibility after a phone call with U.S. President

B.C.’s potential deficit $12.5 billion as spending spikes, taxes drop

Finance Minister Carole James gives COVID-19 outlook

Commercial huckleberry harvesting restricted in Kootenays

The province of B.C. has banned commercial-scale picking from July 15 to October 15

Canadians torn on scaling back COVID-19 benefits to save money: poll

Of those surveyed, 78 per cent said they were worried about the size of the deficit

‘Trauma equals addiction’: Why some seek solace in illicit drugs

Part 2: Many pushed into addiction by ‘toxic stress,’ says White Rock psychologist

Hotel rooms for B.C. homeless too hasty, NDP government told

Businesses forced out, but crime goes down, minister says

Wage subsidy will be extended until December amid post-COVID reopening: Trudeau

Trudeau said the extension will ‘give greater certainty and support to businesses’

B.C. government prepares for COVID-19 economic recovery efforts

New measures after July consultation, Carole James says

Most Read