China slaps tariffs on 106 US products; rejects Trump's demand on trade deficit

The world's top two economies edged towards an all-out trade war as China today rejected the US' demand to cut down trade deficit by USD 100 billion as "unviable" and announced plans to impose retaliatory tariffs worth USD 50 billion on 106 American products, including soybeans, cars and small aircraft.

The move comes after President Donald Trump's administration yesterday published a list of about 1,300 Chinese exports worth USD 50 billion that could be hit by US tariffs because of Beijing's alleged theft of intellectual property and technology.

The Chinese Customs Tariff Commission of the central cabinet, in a retaliatory measure, decided to impose additional tariff of 25 per cent on 106 products under 14 categories worth USD 50 billion, the Ministry of Finance said in a statement.

Affected products will include a wide variety of agricultural products such as soybeans, corn, beef, orange juice and tobacco. A range of chemicals and automobiles, as well as aircraft with unladen weight between 15 tonnes and 45 tonnes, will also be subject to the tariffs.

However, it did not announce a date for their implementation.

"The date of implementation will depend on when the US government imposes the tariffs on Chinese products," it said.

The Ministry of Commerce (MOC) in a statement said that the US' move was "an evident violation" of rules of the World Trade Organisation (WTO).

The US move "severely infringed on the legitimate rights and interests that China enjoys in accordance with the WTO rules, and threatened China's economic interests and security," the MOC said.

New tariffs China decided to impose on US products were a reaction to the "emergency" caused by the US violation of international obligations, it added.

The economies of China and the US are highly complementary, and "cooperation is the only right choice for the two countries," the MOC said.

The MOC said China's decision was taken in retaliation to the US' proposed list of products subjects to additional tariffs, which covers Chinese exports worth USD 50 billion with a suggested tariff rate of 25 per cent.

The US plans to apply the tariffs to about USD 50 billion worth of goods to punish China for its alleged theft of trade secrets, including software, patents and other technology.

Trump is demanding China to cut down USD 375 billion trade deficit by USD 100 billion in about a month.

His move sparked concerns over a trade war between the two largest economies of the world.

China has already slapped tariffs on 128 US products, including wine and pork, totalling to USD 3 billion in retaliation to Trump's move to impose tariffs on steel and aluminium.

China, which enjoys USD 375 billion surplus for the first time directly rejected US President Donald Trump's demand to cut down the deficit by USD 100 billion.

"The Chinese government cannot artificially intervene in the number of deficit of surplus. That is not viable," Chinese Vice Commerce Minister Wang Shouwen told media briefing here today when asked about Trump's demand.

"It is unacceptable to ask China alone to cut the deficit by USD 100 billion as the trade gap is determined by market forces and the overall economic policies and structure of the US."
"Taking into account transit trade and service trade, the real gap is only a third of the figure released by the US government."