Trump tweets 'we are not in a trade war with China'
China calls on WTO to join against US protectionism
Speed of retaliatory steps stun financial markets
China hit back quickly yesterday against the Trump administration's plans to impose tariffs on $50 billion in Chinese goods, retaliating with a list of similar duties on key US imports including soybeans, planes, cars, beef and chemicals.
The speed with which the trade struggle between Washington and Beijing is ratcheting up – China took less than 11 hours to respond with its own measures – led to a sharp selloff in global stock markets and commodities.
US President Donald Trump, who has long charged that his predecessors served the United States badly in trade matters, rejected the notion that the tit-for-tat moves amounted to a trade war between the world's two economic superpowers.
"We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the US," Trump wrote in a post on Twitter early yesterday.
Because the actions will not be carried out immediately, there may be room for maneuver. Publication of Washington's list starts a period of public comment and consultation expected to last around two months. The effective date of China's moves depends on when the US action takes effect.
US Commerce Secretary Wilbur Ross said in an interview with CNBC that it would not be surprising if the US and China trade actions led to negotiations, although he would not speculate on when this might happen.
US-made goods that appear to face added tariffs in China based, on an analysis of Beijing's list, include Tesla Inc electric cars, Ford Motor Co's Lincoln auto models, Gulfstream jets made by General Dynamics Corp and Brown-Forman Corp's Jack Daniel's whiskey.
Unlike Washington's list, which was filled with many obscure industrial items, China's list strikes at signature US exports, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states from Iowa to Texas that voted for Trump in the 2016 presidential election.
While Washington targeted products that benefit from Chinese industrial policy, including its "Made in China 2025" initiative to replace advanced technology imports with domestic products in strategic industries such as advanced IT and robotics, Beijing's appears aimed at inflicting political damage.
Beijing's announcement triggered heavy selling in global financial markets, with US stock futures sliding 1.5 percent and US soybean futures plunging nearly 5 percent and on track for their biggest fall since July 2016. The dollar briefly extended early losses, while China's yuan skidded in offshore trade.
China also launched a dispute settlement procedure at the World Trade Organization yesterday, the commerce ministry said in a separate statement, adding that Washington had committed a "flagrant violation of WTO rules".
Foreign ministry spokesman Geng Shuang said China had shown sincerity in wanting to resolve the dispute through negotiations.
"But the best opportunities for resolving the issues through dialogue and negotiations have been repeatedly missed by the US side," he told a regular briefing yesterday.