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Trade War

Trump administration unveils tariffs on $50bn of Chinese imports

Trade war intensifies with robotics, aerospace and cars targeted

U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping in Beijing in 2017.   © Reuters

WASHINGTON -- The U.S. on Tuesday announced a proposed list of Chinese products to be subject to additional tariffs, a response to what it says are Beijing's forced transfer of U.S. technology and intellectual property infringements.

The move raises the stakes in a trade war between the two countries and was quickly condemned by China, which said it would take corresponding measures of equal strength against U.S. products.

The list from the United States Trade Representative (USTR) contains around 1,300 products, including industrial robots, aerospace products and cars, to which a 25% tariff will be charged. The duties will target approximately $50 billion of goods expected to be imported in 2018.

Production machinery used mainly in factories takes up much of the list. Chemicals and medicines are included as well.

Cars and airplanes have also made their way onto Trump's tariff slate despite the fact the U.S. buys barely a trickle of these big-ticket items from China.

Consumer products, which do make up a large portion of U.S. imports from China, are exempted. Americans, therefore, will likely not be paying more for smartphones, including Apple's iPhone, personal computers, clothing or shoes.

The Trump administration will make a final decision on the new tariffs after hearing the opinions of companies through the end of May. It has scheduled a public hearing for May 15.

If the tariffs are imposed, a large number of companies sending goods to the U.S. from China will be affected.

China's policies "coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises," the USTR said in its announcement. "These policies bolster China's stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as 'Made in China 2025.'"

China's 2025 program targets 10 strategic industries: next-generation information technology, robotics, aviation and space equipment, maritime equipment and high-tech ships, advanced railway equipment, new energy vehicles, electric power equipment, agricultural machinery, advanced materials and pharmaceuticals.

The U.S. and China have engaged in a back-and-forth argument over tariffs over the past month. On March 23, the Trump administration's announced a 25% tariff on steel imports and a 10% tariff on aluminum imports. On Monday, China's State Council imposed additional tariffs of up to 25% on 128 items imported from the U.S., including pork and wine.

Tuesday's announcement by the U.S. follows a Trump administration decision to request consultations with China at the World Trade Organization to address China's supposed discriminatory technology licensing requirements.

China denies its laws require the transfer of technology. Beijing has threatened to retaliate against any U.S. tariffs with its own trade sanctions, and could target U.S. soybeans, aircraft and heavy equipment.

"The U.S. released [its] proposed tariff list in disregard of China's stern representations and on the basis of no facts," said Lu Kang, a Chinese foreign ministry spokesperson, in a statement released on Wednesday morning. "China strongly condemns and firmly opposes such a move, which is typical of unilateralism and trade protectionism."

China plans to resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against U.S. products. 

"We will certainly take countermeasures of the same proportion and of the same scale, the same intensity," said Cui Tiankai, China's ambassador to the U.S., in a television interview Tuesday.

As the U.S. and China clash, fears of a worldwide trade war grow. Yet the two countries may still be seeking common ground behind the scenes.

"We hope that the U.S. side, with sense and the long-term picture in mind, refrains from going further down the wrong path," said a statement released Tuesday by Chinese embassy in Washington, calling for dialogue.

Intellectual property issues are only one problem the U.S. is demanding that China address. Washington also wants China to proactively cut the surplus it enjoys in the trade of goods between the two countries. That surplus stood at $375 billion in 2017, and the U.S. wants the figure reduced by $100 billion.

China wants to resolve the imbalance by increasing its imports of natural gas, semiconductors and cars. The Trump administration has hinted that it will scrap the tariffs, if the two countries resolve the dispute via negotiations.

"The political message sent through the tariffs gives China a better understanding of what the Trump administration wants," said Akihiko Yasui, head of Americas and Europe research at Mizuho Research Institute. Yasui added that since Xi Jinping has successfully concentrated political power in his hands, he can afford to offer concessions in talks with the U.S.

Nikkei staff writer Masayuki Yuda contributed to this article. 

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