China threatens tariffs on US lobsters as business booms

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The United States on Friday announced additional tariffs of 25 percent on Chinese imports worth approximately 50 billion USA dollars, going against the consensus reached in bilateral economic and trade consultations.

China's government responded quickly by announcing it will immediately impose penalties of "equal strength" on United States products.

The tariffs will come in two steps, beginning with duties on 545 US products worth $34 billion that will be focused on farm goods, cars and seafood, Xinhua said. It gave no details but a $50 billion list of possible targets released in April included soybeans and light aircraft for possible retaliation.

U.S. Chamber of Commerce President and CEO Thomas Donohue said tariffs are "not the right approach". It was still on track for a 2.9 percent increase for the year to date.

Trump has already slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world's two biggest economies.

Mr Trump has vowed to fulfil his campaign pledge to crack down on what he contends are China's unfair trade practices and efforts to undermine USA technology and intellectual property. -China trade war fears and dragging down stocks markets as well as soybean prices Friday. These tariffs cover imports of a wide range of industrial parts and machinery, are worth about $34 billion, and go into effect July 6. The first is a scaled-down version of the product list the White House announced in April.

By contrast, the Trump administration earlier this year imposed steep tariffs on imported washing machines. Meanwhile, the other 16 billion dollars worth of Chinese products will undergo further review. A damage which, in United States, would be particularly noticeable in agricultural sector and which in China would fall mainly in technology.

Some Republican lawmakers and pro-business groups criticized Trump's action. Those tariffs could put a lot of economic strain on rural farming districts - many of which helped propel President Trump to victory in the 2016 election.

Wang responded by saying that China hoped the USA would not take "unilateral" and "unconstructive" action that would create new obstacles for the next round of trade negotiations.

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It was unclear whether Beijing might try to make an exception for Chinese-owned US exporters such as pork producer Smithfield Foods. In particular, soy is most disadvantaged good: China is principal buyer of this seed to United States, 12 billion of dollars per year.

Beijing and Washington had held three rounds of high-level talks since early May but failed to reach a compromise.

The ministry says it's also scrapping deals to narrow Beijing's multibillion-dollar trade surplus with the U.S.by purchasing more American farm goods, natural gas and other products. They view plans for state-led development of companies capable of competing globally in fields including electric cars, renewable energy and biotech as a route to prosperity and to restore China to its rightful role as a world leader.

"Neither side will be brought to its knees - which is one reason to think the trade dispute could drag on", Capital Economics said.

Trump has frequently reversed course, threatening and then backing away, or vice versa, but he has appeared determined to take a hard line with Beijing.

Shares of aluminum supplier Alcoa (AA.N) fell 5.2 percent.

The administration characterized the tariffs it announced Friday as entirely proper. But he said that underlying strong economic fundamentals in the United States would dampen the market impact.

The announcement could have major ramifications for the USA seafood industry and for the economy of the state of ME, which is home to most of the country's lobster fishery.

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