Beijing retaliated immediately to tariffs on tens of billions in Chinese imports imposed by US President Donald Trump on Friday, igniting a trade war that threatens to cut into the pair's massive bilateral trade - potentially harming exporters and US multinationals keen on China's huge market.
Trump said the 25 percent tariff is supported by a report from the Office of the U.S. Trade Representative that found China's trade practices related to technology and intellectual property are discriminatory and burden the U.S. economy. Soybeans are China's biggest import from the United States by value.
Escalation looms. In April, Trump asked officials to consider an additional $100 billion in levies.
That mirrored the Trump administration's announcement Friday of a tariff hike on $34 billion of Chinese goods, also due to take effect July 6, and plans to consider widening it to an additional $16 billion of other products.
Washington has completed a second list of possible tariffs on another $100 billion in Chinese goods, in the expectation that China will respond to the initial us tariff list in kind, sources told Reuters.
The dispute revived after the White House renewed its plan for a tariff hike on $50 billion of Chinese goods as part of the technology dispute.
China has published its own list of threatened tariffs on US$50 billion in USA goods, including soybeans, aircraft, and cars, and has said it would hit back if Washington followed up with further measures. The list included 1,333 product lines.
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IMF Director Christine Lagarde said Thursday that a trade war would lead to "losers on both sides" and could have a "serious" impact.
"Technology and innovation are America's greatest economic assets and President Trump rightfully recognises that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness".
"Look, he's my friend, President Xi". Trump cited the interests of national security as the motivation behind that move.
"There isn't one country who would give up their rights to advance technology and make industrial upgrades", said the Global Times editorial.
The European Union has called the USA steel and aluminum tariffs "illegal". In May, Chinese officials had promised to buy more American farm goods, natural gas and other products to narrow China's large trade surplus with the United States. American farmers export about $14 billion worth of soybeans to China each year.
While calling Trump's administration "inconsistent and precarious", it expressed hope a trade war might yet be averted.
The Washington Post and The Wall Street Journal were among the publications reporting overnight that Trump, fresh from his return from the Singapore Summit with North Korean leader Kim Jong Un, has chose to enact significant tariffs on Chinese goods.
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Trump's tariffs may also influence his efforts to bring peace to the Korean peninsula following his summit with leader Kim Jong Un this week in Singapore.