China to hit back at US with $60 billion tariffs

China today said it will slap additional tariffs on about USD 60 billion worth of American products in retaliation to President Donald Trump's plan to raise duty on USD 200 billion Chinese imports, escalating the trade war between the top two economies of the world.

The spat began in April with the Trump administration imposing tariffs on steel and aluminium imports into the US from China, which also retaliated by imposing additional tariffs worth about USD three billion on 128 US products.

The Chinese Commerce Ministry said a decision to impose additional tariffs was made in response to US plan to raise tariffs on USD 200 billion of Chinese goods from 10 per cent to 25 per cent, state-run Xinhua news agency reported.

The Ministry said it would impose tariffs ranging from five to 25% on USD 60 million worth of American products.

The Ministry of Finance said in a statement that the retaliatory measures were in response to the latest US threat on July 11 to slap duties on USD 200 billion worth of Chinese products, and to raise those tariffs from 10 to 25%

The ministry also said that the US measures violated the World Trade Organization rules and damaged China's interests.

"The US has repeatedly betrayed the consensus reached by negotiations, and accelerated the trade war unilaterally again. It has seriously violated the principles of the World Trade Organisation," Hong Kong-based South China Morning Post quoted the statement as saying.

Washington has vowed to take punitive measures to stop Beijing's Made in China 2025 industrial policy supporting domestic companies developing strategic advanced technologies, including robotics and artificial intelligence.

Foreign ministry spokesman Geng Shuang told media that "the Chinese side calls on the US to return to rationality, and eradicate its mistakes to create the right conditions for resolving the problem." The Post reported that China and the US held unofficial talks last week but a deep and mutual distrust continues to hamper efforts to de-escalate their trade dispute.

US Treasury Secretary Steven Mnuchin called China's Vice-Premier Liu He last week in a bid to persuade Beijing to approve US chip maker Qualcomm's takeover deal of Netherlands-based NXP Semiconductors, the Post reported.

Several countries, including China, had a say in the matter because Qualcomm sells its products globally and the proposed merger could have been seen as giving the company a price monopoly, it said.
The refusal by Beijing's anti-trust regulators to approve the deal effectively made Qualcomm the first casualty of the trade dispute, even though China said it had nothing to do with the issue.

The purpose of the talks was to "prepare for more formal negotiations" but the progress had been slowed down due to the mistrust on both the sides, the Post quoted official sources as saying.

Michael Pillsbury, director of the Centre for Chinese Strategy at the Hudson Institute, a conservative think tank in Washington, said at an event in Beijing on Monday that despite the dispute between the US and China, the relationship between Presidents Donald Trump and Xi Jinping was strong.

"I told you, some people say, there has been more than 30 phone calls between Trump and Xi. That's a lot, in 18 months (since Trump took office). And four meetings in person. So, the basic foundation of US-China cooperation is very strong," he added.

The US, the world's largest economy, has a trade deficit of almost USD 500 billion with China, the world's second largest economy.