US Announces Tariffs On US$50b In Chinese Imports

The Trump administration has announced a 25 percent tariff on US$50 billion worth of Chinese imports, escalating a trade dispute between the world's two largest economies.

President Donald Trump vowed on Friday to clamp down on what he called China's unfair trade practices. Beijing has said it will retaliate with US$50 billion in tariffs.

In a statement on Friday morning, the president said: "The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices."

The Office of the U.S. Trade Representative said the tariffs will start to be collected on July 6.

The U.S. trade actions against China could lead to retaliation from Beijing. Trump has already slapped tariffs on steel and aluminium imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world's two biggest economies.

Foreign ministry spokesman Geng Shuang said on Friday that China's response would be immediate and that Beijing would "take necessary measures to defend our legitimate rights and interests." He gave no details.

Beijing earlier drew up a list of US$50 billion in U.S. products that would face retaliatory tariffs, including beef and soybeans, a shot at Trump's supporters in rural America.

Trump's decision on the Chinese tariffs came in the aftermath of his summit with North Korean leader Kim Jong Un. The president has coordinated closely with China on efforts to get Pyongyang to eliminate its nuclear arsenal. But he signalled that whatever the implications, "I have to do what I have to do" to address the trade imbalance.

Administration officials have signalled support for imposing the tariffs in a dispute over allegations that Beijing steals or pressures foreign companies to hand over technology, according to officials briefed on the plans.

Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle U.S. economic growth and undermine the benefits of the tax cuts Trump signed into law last year.

"If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown," Gary Cohn, Trump's former top economic adviser, said at an event sponsored by The Washington Post.

But Steve Bannon, Trump's former White House and campaign adviser, said the crackdown on China's trade practices was "the central part of Trump's economic nationalist message. His fundamental commitment to the 'deplorables' on the campaign trail was that he was going to bring manufacturing jobs back, particularly from Asia."

In the trade fight, Bannon said, Trump has used three major tools that "the American elites considered off the table" — namely, the use of tariffs, the technology investigation of China and penalties on Chinese telecom giant ZTE.

"That's what has gotten us to the situation today where the Chinese are actually at the table," Bannon said. (AP)