This article is more than 2 years old

This article is more than 2 years old

China has accused the United States of igniting a trade war, firing back against Donald Trump’s move to slap tariffs on tens of billions of dollars in Chinese imports.

Trump announced a 25% tariff on $50bn of Chinese goods on Friday, prompting China to retaliate with a similar-sized set of levies, and calling on other countries to take “collective action” against the US.



The moves, after a long war of words, increase the possibility of a full trade war between the world’s two leading economies.

US-China trade tensions escalate as Trump approves $50bn of tariffs - business live Read more

In a statement, the White House said the tariffs would apply to goods that “contain industrially significant technologies”. The administration warned it would pursue further levies if China retaliates.

Trump said the US’s trade relationship with China was “no longer sustainable”.

“My great friendship with President Xi [Jinping] of China and our country’s relationship with China are both very important to me,” said Trump. “Trade between our nations, however, has been very unfair, for a very long time.

“The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices.”

China hit back with 25% tariffs on $50bn-worth of US goods, including agricultural produce, autos and seafood.

In a statement on its website, the Chinese commerce ministry said: “China is unwilling to have a trade war, but the Chinese side has no choice but to strongly oppose this, due to the United States’ myopic behaviour that will harm both parties.”

The measures harm the interests of both countries and disrupt world trade, the statement said, adding: “We will immediately introduce tariff measures of the same scale and strength. All the results from the negotiations previously reached by the two parties will be invalid.”

It also called on other countries to “take collective action” against this “outdated and backwards behaviour”.

“It is deeply regrettable that in disregard of the consensus between the two sides, the US has demonstrated flip-flops and ignited a trade war,” the ministry said.

A list of targeted products issued on Friday by the US Trade Representative’s Office (USTR) focuses on products that contribute to China’s “Made in China 2025” initiative – Beijing’s ambitious plan to upgrade its manufacturing and technology base and grow its own pharmaceutical sector.

The plan, which relies heavily on state subsidies, has called “an existential threat to US technological leadership”, by the Council of Foreign Relations thinktank. Critics charge it relies on the theft of intellectual property and unfair trade practices by the Chinese, and the White House trade adviser, Peter Navarro, a persistent critic of China, has called it a plan to “dominate every single emerging industry of the future”.

Made in China 2025 was mentioned 100 times in the USTR’s March report on China’s trade practices, which formed the basis for Friday’s announcement and was highly critical of China.

USTR said $34bn worth of imports from China in aerospace, automobiles, communications tech, new materials and robotics would be subject to tariffs from 6 July. Another $16bn of imports are undergoing further review.

Trump met his top trade advisers on Thursday to decide when to activate the tariffs, which come as relations with other major trading partners, Canada, the EU and Mexico, have worsened following a fractious meeting of the G7 leaders.



Earlier this week, Trump told Fox News he was “very strongly clamping down on trade” with China. Speaking to Fox & Friends on Friday, he said: “We’re getting on great with China, probably until this morning because we just did a big tariff on China, but that’s OK because I have a wonderful relationship with President Xi. We’ll all work it out. He understands it’s unfair.

“They can’t believe they got away with it for so long. They can’t believe it. They got away with it for 25 years. I’m not just blaming Obama – I’m blaming many presidents and leaders. It should’ve never happened.”

The move is aimed at cutting the US trade deficit with China. China attempted to lessen the levies earlier this month by offering to purchase about $70bn worth of commodities and manufactured goods.

The advisory firm Oxford Economics said the tariffs came “at a bad time for the world economy”.

Oxford Economics calculates that the short-term economic impact of the dispute is likely to be modest, lowering growth by a fraction of a percent in both countries.

“However, such numbers still matter, and the increased uncertainty and risks will weigh on business confidence and investment, especially cross-border investment. Thus, there will be an impact on growth, in China, the US and elsewhere, at a sensitive time for the global economy,” they wrote.

The escalating trade spat comes as farmers and others are increasingly concerned about the impact of a trade dispute both with China and the the US’s other major trading partners.

It comes after a contentious meeting of the G7 world leaders in Canada last week that ended with Canada’s prime minister, Justin Trudeau, calling the US’s recently imposed tariffs on steel and aluminum “insulting” to the countries’ longstanding alliance. In retaliation the US refused to sign a joint communique following the meeting and Navarro said there was a “special place in hell” for any leader who engaged in “bad faith diplomacy” with Trump. He later apologised.