The recently proposed measures by United States on Chinese goods in an attempt to curb mal-practices by the Chinese government was retaliated by China with 25 per cent tariffs on critical American exports, including soya beans, aeroplanes and cars.
On Tuesday, the President Donald Trump administration threatened to impose tariffs on $50bn in Chinese imports across 1,300 categories of products, which comes from a range of industrial robots to locomotives.
The response from the China side came just hours after the US revealed its plans with China’s foreign ministry saying in a statement that America’s measures to impose tariffs have violated the rules of the World Trade Organisation, and have seriously violated China’s legal rights”.
US agricultural export to China includes Soya beans as a top product and counts under the 106 products on which China intends to impose the additional tariffs.
The United States is the second-biggest soya bean supplier to China only after Brazil.
No tariff from both the sides will take effect immediately.
The Chinese government did not say specifically about the penalties that would be imposed, but the Chinese finance ministry said that the concerned authorities are keeping a close watch over the issue of US implementing its actions.
There is a chance that these tariffs may never be imposed if the two sides agree over an y deal to open further China to US imports.
US companies have got time to raise any objections until May 22 and a public hearing is already scheduled for May 15 in Washington, DC.
It may take the time until the end of May or early June for the tariffs to come into force.
The latest introduced tariffs is in addition to the just a time ago imposed 25 per cent tariffs on Chinese steel and 10 per cent on aluminum.
Japan may also get its part of its blow due to these targets, while many of the countries got a temporary exemption.
Responding to the steel and aluminum tariff, China retaliated with its own duties on around USD 3 billion of US agricultural goods in the dispute.
The Chinese embassy in Washington, DC, said in a statement that “such unilateralistic and protectionist action has gravely violated fundamental principles and values of the WTO. It serves neither China’s interest, even less, the interest of the global economy”.
Last year, the US ran a USD 375bn trade deficit with China, which Trump wants to see reduced by at least USD 100bn.
“We intend to get along with China, but we have to do something very substantial about the trade deficit,” Trump said on Tuesday.
The tit-for-tat measures raise concerns that it might prove to be a full-blown trade war and the news of Chinese retaliation has already shaken markets.
A journalist reporting from New York, said that an “opening trade war” is behind the sudden drop in stocks on Wall Street, noting that major companies such as Boeing could be affected.
“Wall Street does not like uncertainty, and that’s certainly what they’re seeing,” the Journalist said.
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