State media accuses Trump administration of acting like a ‘bunch of hoodlums’ as tariffs on $34bn in Chinese goods go into effect

A long-threatened trade war between the US and China has got under way after the world’s two largest economies imposed tariffs on each other. The US implemented tariffs on $34bn in Chinese goods, to which Beijing responded with levies on a similar quantity of US imports.



Minutes after the US tariffs went into effect at 12.01am on Friday US time, a spokesperson for China’s ministry of commerce said, “China promised not to fire the first shot, but in order to safeguard the country’s core interests as well as that of the people, it is forced to fight back,” according to Xinhua. The ministry stopped short of saying China had implemented its retaliatory duties.

Later on Friday, a spokesman for the ministry of foreign affairs said after the US tariffs kicked in, Chinese tariffs on US goods had immediately gone into effect.

Ahead of the tariffs, Chinese state media published a series of editorials criticising the US and emphasising the country’s readiness for a trade war. Chinese companies and investors girded for the worst, while economists cautioned any impact on the economy would be minimal.

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“If what the US wants is to escalate a trade war with China, then so be it. A little fighting may be the only way the Trump administration clears its mind and allows everyone to sober up,” the state-run Global Times said on Friday.

“The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China,” said an English-language article in the China Daily. On Thursday, a spokesperson for China’s ministry of commerce said the US will be “opening fire on the whole world and also opening fire on itself.”

China’s central banker said Trump’s promised tariffs of 25% on $50bn of Chinese goods – Friday’s $34bn to be followed by $16bn in a few weeks – would shave 0.2 percentage points off of China’s GDP and the “overall impact would be limited,” according to Xinhua.

Still, Chinese investors and companies were worried. The Shanghai Composite index was down 1.1%, after reaching more than a two-year low this week before rallying after the tariff deadline passed. Chinese manufacturers have already been hit by a strengthening yuan that has made exports more expensive.

Q&A What is the China-US trade war about? Show Hide The roots of the dispute come from US president Donald Trump’s “America first” project to protect the US’ position as the world’s leading economy, while encouraging businesses to hire more workers in the US and to manufacture their products there. Trump complains of a large trade deficit with China, which he views as a symbol of the US’s decline as a manufacturing powerhouse. Chinese imports to the US totalled $539.5bn last year, while $120.3bn was sold the other way – leaving a trade deficit of $419.2bn. The president has accused Beijing of “unfair” trade policies, including allowing the theft of US companies’ intellectual property. The threat of import tariffs on Chinese goods is being used as leverage in talks where Trump is seeking changes to Beijing’s trade policy. Tariffs have been imposed by Washington on some Chinese goods sold in the US for about a year. They came on top of broader tariffs used by Trump that have hit China and other trading partners such as the EU, Canada and Mexico, on goods including steel and aluminium. In May 2019 the US president further ratcheted up existing import tariffs of 10% on $200bn (£153bn) of Chinese goods sold in the US to 25%, hitting everything on a long list of products. Trump has previously warned that 25% tariffs could be slapped on a further $325bn of goods – which would mean all Chinese imports being covered by tariffs. However, talks in November 2019 aimed at easing tensions were welcomed as the beginning of a thaw in the trade war between the two nations. Richard Partington and Jasper Jolly

“One of the biggest competitive advantages of Chinese exports is their low price. After tariffs are imposed, prices for Chinese made goods will rise and we’ll lose our comparative advantage,” said a representative for Sanhua Micro-Channel, which makes components for air conditioners in China’s eastern Zhejiang province.

The company said it had already moved some production to the US and Mexico and would likely move more. Others say they are turning their focus to Chinese consumers.

“China is a big market for us. If we can seize our own market, we will be less affected by the trade war,” said a spokesperson for Topsun, a furniture manufacturer in Zhejiang province.

Chinese tariffs on US agricultural products will also affect Chinese importers. Lu, who runs a shop at a fruit retail centre in central Beijing, said the prices of imported US fruit – subject to tariffs of as much as 50% – are certain to rise.

Still, he understands the US perspective. “Americans want to earn more money so they started a trade war. I can understand that. Who doesn’t want to earn more money?” he said.

Chinese media reported a container ship carrying 70,000 tons of US soybeans was racing to reach the port of Dalian on Friday before retaliatory tariffs were implemented. Some Chinese ports have stopped clearing US goods while waiting for official guidance, according to Reuters.

Trump has threatened to raise tariffs if China retaliates to roughly the value of total Chinese exports to the US last year of $506bn. He told reporters aboard Air Force One on Thursday, “You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200bn in abeyance and then after the $200bn, we have $300bn in abeyance. Ok? So we have 50 plus 200 plus almost 300.”

Analysts say tariffs are not the most effective way of putting pressure on China, which the US accuses of unfair trade practices and stealing intellectual property from US companies.

Syracuse University economics professor Mary Lovely and researcher Yang Liang found 87% of electronics products to be levied by US tariffs came from multinationals and joint ventures rather than Chinese firms.

China’s economy is no longer as dependent on exports. Domestic consumption now accounts for more than half of the country’s GDP. Exports to the US account for only 19% of all of China’s exports.

“The reciprocal tariffs on US$50bn of goods in both directions will have minimal impact in China,” Andy Rothman, an investment strategist at Matthews Asia, wrote in a blog this week. China’s tariffs on major US exports like soybeans, sorghum, and autos, target Republican areas ahead of US midterm elections. “The impact on the US political environment is, however, likely to be far greater,” he said.

One area that will be hurt by US tariffs is China’s high tech industries, in things like new energy vehicles, robotics and other forms of smart manufacturing, that form the country’s “Made in China 2025” industrial plan.

Cheng Dawei, a professor of international trade at Renmin University in Beijing, says these industries are still in their early stages and need inputs from global supply chains.

“In the short run, China will be affected badly... But the tariffs will bring double-lose results. China is never the only side to suffer,” she said. “Imposing high tariffs definitely hurts China badly, but we will not be beaten down.”

Additional reporting by Wang Xueying