In this July 4, 2018, photo, a robot from Chinese search company Baidu welcomes visitors to a developer event in Beijing, China. (AP Photo/Ng Han Guan)

US-China kick off ‘biggest trade war in economic history’

The Trump administration contends China has deployed predatory tactics in a push to overtake U.S. technological dominance.

The United States and China launched what Beijing called the “biggest trade war in economic history” Friday, imposing tariffs on billions of dollars of each other’s goods amid a spiraling dispute over technology.

The Trump administration is confronting China over development tactics it says include stealing technology or pressuring foreign companies to hand it over. American officials worry U.S. industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence.

Washington imposed 25 per cent duties on $34 billion of imports from China, the first in a series of possible increases that President Donald Trump says could affect up to $550 billion of Chinese goods, more than the total amount China exported to the U.S. last year.

The first round targets Chinese industrial goods, not consumer products, in an attempt to limit the impact on U.S. households, but companies that rely on Chinese-made machinery or components may eventually have to pass along increased costs to customers.

The Chinese Foreign Ministry said “retaliatory tariffs” also took effect, but provided no other details. The Communist Party newspaper People’s Daily said tariffs were imposed on a list of goods issued last month that included soybeans, pork and electric vehicles. U.S. soybean farmers have been particularly concerned, and the price of soybeans has plunged 17 per cent over the past month on tariff fears.

Washington has “ignited the biggest trade war in economic history,” said a Commerce Ministry statement.

Related: Trump complains about “STUPID TRADE” with China

Related: Trudeau thanks Canadians for standing up for each other

During an official visit to Bulgaria, China’s No. 2 leader, Premier Li Keqiang, said “no one will win by fighting a trade war, yet China will take countermeasures in the face of unilateral moves.”

Companies worry the dispute could chill global economic growth, but Asian financial markets took Friday’s developments in stride.

Japan’s main stock index, the Nikkei 225, gained 1.1 per cent while the Shanghai Composite Index added 0.5 per cent. Hong Kong’s Hang Seng also rose 0.5 per cent.

The conflict between the world’s two biggest economies reflects chronic tension in their relationship as customers, business partners, and increasingly competitors. It also is rooted in the clash between American notions of free trade and Beijing’s state-led development model.

China’s ruling Communist Party has insisted on making changes at its own pace while sticking to state-directed technology development seen as the path to prosperity and global influence. Beijing has announced reforms this year including ending limits on foreign ownership in its auto industry, but none directly addresses complaints that are fueling its conflict with Washington.

On Thursday, Trump said higher tariffs on an additional $16 billion in Chinese goods were set to take effect in two weeks.

After that, the hostilities could intensify: Trump said Washington is ready to target an additional $200 billion in Chinese imports — and then $300 billion more — if Beijing does not yield.

That would bring the total of targeted Chinese goods to $550 billion — more than the $506 billion in goods that China shipped to the United States last year.

Chinese officials reject accusations they steal or force foreign companies to hand over technology. But rules on auto manufacturing and other industries require companies to work through state-owned partners, obliging them to share know-how with potential competitors.

Other governments express similar complaints toward Beijing, but Washington has alienated potential allies by raising import duties on steel, aluminum and autos from Europe, Canada, Mexico and Japan. Some have responded by hiking their own tariffs on U.S. goods.

Trump’s confrontational outlook applies to other trading partners as well as China, said Tai Hui, chief strategist for JP Morgan Asset Management, in a report.

“This is a potential concern for the outlook of corporate investment and consumption around world,” Hui said.

The official China Daily newspaper accused the Trump administration of “behaving like a gang of hoodlums.” It said they would damage the global economy unless other countries stop them.

“There should be no doubting Beijing’s resolve,” the newspaper said.

Forecasters say global economic growth could be reduced by up to 0.5 percentage points in 2019-20 if both sides wind up raising tariffs on $250 billion of imports.

The American Chamber of Commerce in China appealed to both sides to negotiate.

“There are no winners in a trade war,” the chamber’s chairman, William Zarit, said in a statement. Companies want fairer treatment but will be hurt by U.S.-Chinese tensions, Zarit said. “We urge the two governments to come back to the negotiation table.”

___

Wiseman and Superville reported from Washington. AP Writer Catherine Lucey on Air Force One contributed.

Joe McDonald, Paul Wiseman And Darlene Superville, The Associated Press

Like us on Facebook and follow us on Twitter.

Just Posted

A mind of their own

I was talking to my mom this week, who remarked that kids… Continue reading

Get your cowbells, the Cowboy Concert will be in 100 Mile House on Feb. 16

The matinee show is sold out but tickets are still available for the evening show

Small programs can make a big difference

At the 100 Mile Free Press, we’re currently working on completing this… Continue reading

Snowarama coming to Green Lake area

Poker run, 50/50 draw and an open house at the snowmobile club

Mermen calendar targets ‘toxic masculinity,’ raises big money for charities

Newfoundland and Labrador Beard and Moustache Club gave a cheque for more than $202,000 to Violence Prevention NL

Minister says plans to fight poverty, climate change, focus of B.C. budget

The NDP said in its throne speech last week that affordability will be the hallmark of its initiatives

UPDATED: ‘Violent’ B.C. man back in custody after Alberta arrest

Prince George man with ties to Vernon was being sought by police

After a week away, SNC-Lavalin questions await MPs returning to Parliament

Two have resigned already: Jody Wilson-Raybould was veterans affairs minister and Gerald Butts was Trudeau’s principal secretary

‘How did we get here?’: B.C. mom of transplant recipient worries about measles outbreaks

Addison, 7, cannot get a live vaccine because she has a heart transplant

Poverty coalition has high hopes for B.C. poverty reduction strategy

Funding allocation expected to be released with 2019 budget

Chanel: Iconic couturier Karl Lagerfeld has died

He spent virtually his entire career at luxury labels catering to the very wealthy

Interior Health on high alert for possible measles cases

No reports of the disease yet, but regular travel to the Coast could bring measles to the Interior

Lost a ring? This B.C. man will find it for you

Chris Turner founded The Ring Finders, an international directory of metal detector hobbyists

Most Read