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updated 10:20 AM UTC, Dec 13, 2023

China Threatens New Tariffs on $60 Billion of U.S. Goods

BEIJING, The New York Times: China threatened on Friday to tax an additional $60 billion a year worth of imports from the United States if the Trump administration imposes its own new levies on Chinese goods.

The threat comes just two days after President Trump ordered his administration to consider increasing the rate of tariffs it has already proposed on $200 billion a year of Chinese goods — everything from chemicals to handbags — to 25 percent from 10 percent.

The United States and China, the world’s two biggest economies, have for months been engaged in an escalating trade dispute. While they have targeted each others’ products, the interconnected nature of the global economy has meant that other regions, like Europe, have also been caught up in the back-and-forth.

Beijing and Washington imposed matching tariffs last month on $34 billion apiece of each others’ products, and have plans to add another $16 billion worth of goods to their lists. Previous rounds of tariffs cover a lengthy list of products from steel and aluminum to washing machines and even dried fruit.

The latest Chinese tariffs would, if implemented, be up to 25 percent, and cover 5,207 tariff categories, the country’s commerce ministry said in a statement on its website.

“Because the U.S. side has repeatedly escalated the tension, disregarding the interests of enterprises and consumers of both sides, China has to take necessary countermeasures to defend the country’s dignity and the interests of the Chinese people, defend free trade and the multilateral system, and defend the common interests of all countries in the world,” the ministry said.

China’s decision to threaten $60 billion of American goods is the first time this year that Beijing has not tried to match Washington’s tariffs dollar for dollar. China instead is threatening roughly two-fifths of its purchases from the United States after President Trump threatened two-fifths of China’s much larger exports to the United States, said Tu Xinquan, the executive dean of the China Institute for World Trade Organization Studies at the University of International Business and Economics in Beijing.

“It’s more proportionate,” Mr. Tu said.

China wants to find a negotiated solution to the two sides’ trade policy differences, but also could not simply ignore President Trump’s threat earlier this week, Mr. Tu added.

Mr. Trump ordered the Office of the United States Trade Representative on Wednesday to consider the possibility of 25 percent tariffs on $200 billion a year worth of Chinese goods. The 25 percent tariffs could be imposed in place of 10 percent tariffs that are already under discussion. Those tariffs have not taken effect, and a final decision on their size and scope is not expected until next month.

Beijing did not really have the option of responding dollar for dollar because China simply does not buy that much from the United States. China sells goods each year to the United States worth nearly four times as much as it buys.

But Chinese officials have suggested in recent weeks that if the United States proceeds with tariffs on a very wide range of Chinese goods, then Beijing may also retaliate against the Chinese-owned operations of big American companies. From Apple to General Motors, a long list of large American enterprises have transferred extensive operations to China and could be vulnerable to any response from Beijing.

The iPhones, Chevrolets and other products manufactured and sold in China by American companies are mostly designed in the United States, and the Trump administration has declared various Chinese industries to be threatening American national security, illegally copying foreign intellectual property or causing widespread job losses in the United States. China has denied violating international trade norms.

China’s latest threat on trade came at the end of a day during which Beijing also allowed its currency, the renminbi, to slide further against the dollar in foreign exchange markets. The currency is allowed to trade in a daily range set by the central bank.

China’s central bank has now let the currency slip almost 9 percent since mid-April, when it took less than 6.3 renminbi to buy a dollar. A weaker renminbi makes Chinese exports more competitive in foreign markets, while making imported goods more expensive within China. Government advisers and analysts have said that the government is not deliberately driving the currency down against the dollar to derive a trade advantage, but is being led instead by traders in currency markets, who are increasingly worried about China’s slowing economy and huge debt burden.

By adding the option of 25 percent tariffs, however, the Trump administration would have an extra weapon in case the renminbi falls further and gives Chinese exporters an added advantage.

The Chinese commerce ministry’s statement appeared to anticipate possible tariff levels that the Trump administration might impose, with the ministry saying that it was mulling tariffs at four possible levels on the $60 billion in goods, ranging from 5 percent to 25 percent

China sold $505.6 billion worth of goods to the United States last year and purchased $130.4 billion. The United States did run a $38.5 billion trade surplus last year with China in services, like banking and insurance. But part of this sum may have represented efforts by worried Chinese families and households to move money out of the country, as opposed to actual purchases of services provided by American companies and individuals.

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