Move comes less than a week after US president escalated trade dispute with new threats

This article is more than 2 years old

This article is more than 2 years old

China has filed a complaint against the US at the World Trade Organization after Donald Trump’s threats to place tariffs on an additional $200bn (£150bn) worth of Chinese goods.

The one-sentence announcement by the ministry of commerce comes less than a week after the US president called for a second round of tariffs on China, in retaliation for Chinese tariffs placed on American goods.

China files WTO challenge over US tariffs, as its economy slows – business live Read more

On 6 July, the US imposed 25% tariffs on $34bn in Chinese goods, prompting Beijing to hit back with levies on the same amount of US exports to China. In response, the White House last week released a wide-ranging list of Chinese goods, from tobacco to pet food, worth $200bn it would target with a 10% tariffs. Beijing said it would “fight back as usual” and would file a complaint with the WTO.



The latest round of tariffs would not come into effect until September, making China’s response uncharacteristically quick. Up to now Beijing has waited for Washington to “fire the first shot” in the escalating trade war.

Chinese economic data on Monday fanned fears that trade frictions between the two countries may soon have an impact on the world’s second largest economy. China’s $12.5tn economy expanded 6.7% in the second quarter compared with the same period a year earlier. It was in line with expectations but was modest by recent Chinese standards.

The FTSE 100 index was down just over 1% by lunchtime in London on Monday. In Asian trading, MSCI’s index of Asia Pacific shares except for Japan fell 0.36%, while mainland Chinese stocks, already among the world’s worst performing this year, fell 0.6%.

Mao Shengyong, a spokesman for China’s National Bureau of Statistics said the economy’s growth was stable, but added: “The uncertainties of the external environment are mounting.



“Generally speaking, trade frictions unilaterally started by the US will have an impact on the economy of both countries.”

In total, the US has threatened to place tariffs on more than $500bn worth of Chinese goods to the US, an amount that Beijing cannot reciprocate. US exports to China last year were worth about $130bn.

Some US business groups worry the disparity will push Beijing to hit back with “qualitative measures” such as delaying approvals for inward investments into China, extra customs inspections for goods or boycotts of American brands.

The trade war is not the only potential drag on China’s economy. Over the last few years the Chinese government has launched a campaign to reduce financial risk by tightening lending and reining in excess debt. Analysts say that has led to a broader slowdown.

Factory output in June fell to a two-year low. The country also faces a slowing property market and slower-than-expected domestic consumption. Retail spending rose 9% in June, half a percentage point higher than the month before.

“Uncertainty about the scale and composition of US tariffs on China’s exports is already dampening business confidence and delaying investment,” Louis Kuijs, the head of Asia economics at Oxford Economics, said in a note.



“If the US and China do not resume talks in the next two months or so, the conflict will escalate further, with major economic implications for themselves and the global economy.”

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Despite the slowdown, China’s monthly trade surplus with the US hit a record high in June, widening to $29bn, from $24.6 in May. For the first half of this year, Chinese exports to the US were 13.6% higher.

China has repeatedly said it can weather a trade war better than the US but the prospect of tariffs on as much as $500bn of Chinese goods has worried investors and businesses.



Forecasters say if the first US round of tariffs, implemented on 6 July, is expanded to cover another $200bn of goods as Trump has threatened, China’s economy could lose 0.4 percentage points, according to HSBC estimates.