The White House has given explanation for the extra tax on the imports from China saying that the unfair Chinese practices around intellectual property rights had compelled them.

 

Among many items in the list, products such as medical items, televisions and  motorcycles were also included.

In reponse to the new policy, Beijing said “strongly condemns and firmly opposes” the tariffs.

“Such unilateralistic and protectionist action has gravely violated fundamental principles and values of the WTO [World Trade Organisation],” the Chinese embassy in Washington expressed in a statement on Wednesday.

China stated that the US decision did not serve both country’s interests and “even less the interest of the global economy”.

“As the Chinese saying goes, it is only polite to reciprocate,” the statement said.

“The Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against US products in accordance with Chinese law.”

Economists had earlier, warned that the move by the Trump administration to punish China with the new tariffs could prompt Beijing to reciprocate and eventually lead to higher prices for American consumers.

The recent release of the list comes just after China hit USD3 billion worth of US products with new tariffs to counter the tariffs imposed by US on steel and aluminum.

The products on the released list which US published on Tuesday represent imports worth about $50bn annually.

The office of the US Trade Representative, which manages trade negotiations, asserted that the amount was “appropriate both in light of the estimated harm to the US economy and to obtain elimination of China’s harmful acts, policies and practices”.

A final list will be determined soon after a public comment period and review which is expected to last about two months.

The new tariff plans are the result of an investigation that US President Donald Trump’s government conducted last year into China’s intellectual property practices.

Just in the last month, the probe found sufficient evidence of problems pertaining to the practices that compel US companies to share technology with Chinese firms and ordered a list of products drawn up for tariffs.

While announcing, Chinese embassy in Washington said that it hoped the United States would “with sense and long-term picture in mind, refrain from going down the wrong path”.

US business groups have also urged the two sides to try to resolve the issues through dialogues, with the expression of the concern that threatening tariffs could lead to a dispute that hurts the US economy.

The US Chamber of Commerce said: “The administration is rightly focused on restoring equity and fairness in our trade relationship with China. However, imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends.”

Chinese economy is not much dependent on exports in recent years, which is likely to have no effects due to the tariffs, according to some analysts for S&P Global Ratings.

China exported about 18.2% percent of its total goods to US in 2016 according to the US trade department.

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