Trump trades blows with China as each side pledges import tariffs worth total of $100bn

Duties take the nascent trade war between China and the US to the next level of hostilities

China responded to Donald Trump’s pledge on Friday of new tariffs on $50bn (£38bn) worth of Chinese products, by saying it would impose levies of “the same scale” on US imports.

The tit-for-tat takes the nascent trade war between China and the US to the next level of hostilities.

In a White House statement, the president said he will impose a 25 per cent levy on goods imported from China “that contain industrially significant technologies” such as jet engines, robotics, cars and machinery.

He also promised “additional tariffs” if China retaliates.

Mr Trump said he was implementing the tariffs because of “China’s theft of intellectual property and technology and its other unfair trade practices”.

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

In response, the Chinese commerce ministry pledged to “firmly defend” its interests.

“The Chinese side doesn’t want to fight a trade war, but facing the shortsightedness of the US side, China has to fight back strongly,” it said in a statement.

“We will immediately introduce the same scale and equal taxation measures, and all economic and trade achievements reached by the two sides will be invalidated.”

Economists warned that the impact of the new trade frictions would be economically damaging for both sides.

Louis Kuijs, of Oxford Economics, said: “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.”

In a statement the US Trade Representative’s office said that the list of Chinese targets would not include “goods commonly purchased by American consumers such as cellular telephones or televisions”, but would be aimed at firms central to Beijing’s “Made in China 2025” strategy for industrial advance.

The first tranche of levies on 818 product lines, worth $34bn, will come into force on 6 July. Tariffs on a second tranche of $16bn in goods will come into effect at a later date.

The trade office added that some US firms which heavily rely on the affected imports could get a waiver from the new duties, with the process for claiming this to be set out over the next few weeks.

The move follows through on an announcement of $50bn of levies on Chinese imports from Mr Trump in March.

In May the US president, who said at his inauguration last year that “protection will lead to great prosperity and strength”, also caused outrage by putting 25 per cent tariffs on steel imports from the European Union, Canada and Mexico, citing a “national security” threat to the US.

The G7 meeting last week ended in acrimony after Mr Trump withdrew support for the final communique, after the Canadian prime minister and summit host, Justin Trudeau, strongly criticised the steel tariffs.

But the Trump administration’s relationship with Beijing on trade has flip-flopped.

In an unexpected move last month, Mr Trump reached a deal with Beijing to effectively throw a lifeline to the Chinese technology company ZTE, despite the fact that it had been caught violating US sanctions on exporting equipment to Iran and North Korea.

The White House is currently trying to stop congress overturning the deal.

Chinese purchases of US soybeans – produced by farmers in heavily Trump-voting agricultural states – have already plummeted in recent weeks, according to official figures.

Mr Trump frequently rails against the goods trade imbalance with China, which official data shows hit $376bn in 2017.

The US president claims this is evidence that trade is rigged against the US.

But economists have pointed out that the main driver of the trade gap is the gap between total US domestic spending and income – and that the Trump administration’s large income tax cuts are liable to make this gap still larger, notwithstanding any tariffs to curb particular imports.