SHANGHAI — China said it would impose tariffs on $75 billion in American-made goods if President Trump carries through on his promise to escalate his trade war with Beijing, in a sign that neither side is ready to back down from an economic conflict that has already cast a shadow over global growth prospects.
China’s plans to retaliate, which were announced late on Friday in Beijing, include putting tariffs on American agricultural products, crude oil and cars.
The news was likely to unnerve investors who worry that the trade war between the world’s two largest economies will drag down global growth. Markets fell on the news in afternoon trading in Europe, and Wall Street opened lower. It also comes at a time of growing nervousness in the United States over the economy, which shows signs of becoming a liability for Mr. Trump as he seeks re-election.
“I think China’s trying to show that, cooperation or fight, it is ready to do both and it is not going to be pressured into an unfavorable trade deal,” said Andy Mok, a trade and geopolitics specialist at the Center for China and Globalization in Beijing.
Mr. Mok said that China’s willingness to impose a tariff on imports of crude oil from the United States, even though China needs a lot of imported oil, shows Beijing’s determination. “One way you show your seriousness in a negotiation is to show you’re willing to incur costs,” he said.
The State Council Tariff Commission in Beijing said that the tariffs were a response to Mr. Trump’s threat to impose new tariffs by Sept. 1. Mr. Trump had initially said he would impose 10 percent tariffs on $300 billion in Chinese-made goods on that date, essentially targeting everything that the United States buys from China that has not already been hit by previous rounds of tariffs. He later delayed more than half of the latest round of tariffs until Dec. 15 to avoid hitting American pocketbooks during the holiday shopping season, and he canceled another one-tenth of it.
Both sides have a lot at stake. Recent market moves have signaled that many investors expect the American economy to slide into recession in the future, with the trade war as a major reason.
The Chinese government has its own worries. The country’s economic growth is already slowing. Though the Chinese government keeps tight control over the country’s economy and still has a lot of financial firepower at its disposal to help growth, a huge and growing debt problem has limited its options.
Like the American tariffs, China’s proposed tariffs would go into effect in two stages. The new tariffs would take effect on Sept. 1 and on Dec. 15, according to the commission. Those dates match when Mr. Trump’s tariffs would go into effect. The commission did not provide the value of how much would be penalized in the first batch and how much in the second.
Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington, estimated earlier this month that the tariff categories identified by the Trump administration represented $112 billion in goods facing extra 10 percent tariffs on Sept. 1 and a further $160 billion on Dec 15.
Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com