China responds after Trump proposes tariffs and claims unfair trade practices

David Jackson | USA TODAY

Show Caption Hide Caption Trump signs order punishing China on trade President Trump took the first step in imposing tariffs on as much as $60 billion worth of Chinese imports. The order is aimed at punishing Beijing for allegedly stealing American technology. (March 22)

WASHINGTON — President Trump ordered trade officials Thursday to draw up a list of tariffs on Chinese products, despite threats of retaliation from China and warnings from American business groups that the move would lead to higher prices for all consumers.

Trump said the yet-to-specified tariffs are designed to address what the administration called unfair Chinese trade practices — "China's economic aggression," a White House statement said.

"We're doing things for this country that should've been done for many, many years," Trump said at the White House.

In response, China said it may raise tariffs on U.S. pork, aluminum pipe and other goods, the Associated Press reported Thursday night.

The Commerce Ministry said on Friday local time that China last year bought about $3 billion worth of the goods that could be affected by higher tariffs.

The ministry criticized Trump’s action as a violation of global trading principles.

The measures mentioned Friday almost mirror the higher U.S. tariffs of 25% on steel and 10% on aluminum by suggesting 25% increases on some goods and 15% on others.

On Thursday, the Chinese Embassy in Washington said in a statement that "China is not afraid of and will not recoil from a trade war." It called Trump's moves "self-defeating," and said they would "directly harm the interests of U.S. consumers, companies, and financial markets."

The Dow was down more than 700 points Thursday.

The administration announced the filing of formal complaints with the World Trade Organization, though Trump said the WTO has been "a disaster" for U.S. trade and has often acted unfairly to Americans.

Under a memorandum signed at the White House, Trump ordered the U.S. trade representative to develop a list of specific tariffs within 15 days; that list would be subject to a period of public comment before they took effect.

Trump announced the results of a trade representative's investigation on Chinese trade practices, including claims of cybertheft of American trade secrets.

The United States aims for tariffs on $50 billion to $60 billion of Chinese imports, seeking to match the amount it says U.S. companies lost because of Chinese trade practices.

After 11 p.m. ET Thursday, the White House released a proclamation on the aluminum and steel tariffs the president announced earlier this month, saying certain countries will have their tariffs suspended until May 1. Tariffs on such goods from Argentina, Australia, Brazil, Canada, Mexico, the European Union countries, and South Korea were put on hold because the countries' "important security relationships" with the U.S. warranted further discussion.

Business leaders warn against tariffs

U.S. businesses are likely to comment against tariffs, having asked Trump not to take such a step.

Some business leaders said they agree Chinese trade practices need to be reined in, but tariffs would invite Chinese countermeasures on American products, leading to higher prices on consumer goods.

"The only way we’ll truly make lasting progress is through a strategic approach that uses both carrots and sticks to accelerate changes to Chinese policies," said Jay Timmons, president and CEO of the National Association of Manufacturers.

That includes "efforts to forge a fair, binding and enforceable trade agreement with China that requires them to end these practices once and for all," Timmons said.

Last week, a coalition of retail groups sent a letter to Trump warning that tariffs against China would invite retaliation affecting their sales.

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Noting that the United States already levies import taxes on items such as clothes and shoes, the group said new tariffs "would worsen this inequity and punish American working families with higher prices on household basics like clothing, shoes, electronics and home goods."

The Chinese had vowed to hit U.S. goods with tariffs of their own if Trump followed through on his plan.

"China will certainly take all necessary measures to resolutely defend its legitimate rights and interests," said a statement from the Ministry of Commerce hours before Trump's announcement.

Last month, Trump announced the imposition of tariffs on steel and aluminum imports. The administration is considering exemptions for some allies that export steel, but China is not likely to be granted such status.

Trump's China tariffs plan drew support from some lawmakers, including Democrats.

Senate Minority Leader Charles Schumer, D-N.Y., said he agreed with findings that China obtained trade advantages by basically stealing U.S. intellectual property and forcing U.S. businesses to share technology as a condition of doing business in the country.

"Let's make sure that China starts playing by the rules," Schumer said.

Trump is right to take a "hard line" against China's dishonest practices, said Rep. Kevin Brady, R-Texas, the chairman of the House Ways and Means Committee. But "tariffs are taxes," Brady said, and the administration should look at "how to punish China without harming our families, businesses and farmers."

In his remarks at the White House, Trump said he regards China as "a friend," and he has spoken with President Xi Jinping and other officials about his problems with their trade practices. Trump said the Chinese have "gotten away" with things for far too long.

More: Trump ponders tariffs on China over intellectual property and technology thefts

Trump emphasized trade policy during his 2016 campaign, complaining that countries took advantage of the United States. He likened Chinese policies to "rape" of U.S. manufacturing and industry.

Trump said Thursday that his team seeks to renegotiate the North American Free Trade Agreement with Canada and Mexico, as well as a free-trade deal with South Korea. He suggested he may void these agreements if negotiations don't work out.

"We've had this abuse by many other countries and groups of countries that were put together in order to take advantage of the United States," Trump said. "And we don't want that to happen."

Chinese officials denied the U.S. allegations. They said they plan to open their economy more to level the playing field between Chinese and foreign firms.

“I hope both China and the U.S. will act rationally and not be led by emotions and avoid a trade war,” Premier Li Keqiang said this week.