China ready with additional tariffs

business August 04, 2018 09:45

By Zhong Nan, Jing Shuiyu and Chen Jia
China Daily
Asia News Network

4,114 Viewed

New duties to target different products, industries if US escalates trade friction

China is ready to levy differentiated additional tariffs on about $60 billion of imports from the United States, if the latter further escalates trade frictions, the Customs Tariff Commission of the State Council announced late on Friday.

China plans to slap additional tariffs on 5,207 categories of US products with four levels of tariff rates — 25 percent, 20 percent, 10 percent and 5 percent. These tariffs will become effective if the US further hinders bilateral trade by renewing tariffs on more Chinese products, the commission said in a statement.

The announcement came after the Office of the United States Trade Representative announced earlier this week that it was considering increasing the proposed additional duty on $200 billion of Chinese products from 10 percent to 25 percent. The 25 percent duty would be applied to the proposed list of $200 billion of Chinese products announced on July 10.

The US already imposed additional tariffs on $34 billion worth of Chinese goods earlier in July, and China has responded in kind. The commission stressed that China adopts the tariff measures to defend its lawful rights and interests, and to curb the escalation of trade friction, as well as minimize the impact on domestic production and people's livelihoods.

Based on rational and thorough research and consultation, China's latest move takes into full consideration the interests of Chinese people and companies, and is expected to defend the multilateral trading system and global industrial chain, according to Chinese authorities and analysts.

China's new four-level tariff policy targets different US products and industries, Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, told China Daily.

"For the goods that have less impact on China's industrial production and consumption, the tariff rates are much higher, but that can effectively hit back on the US when it is necessary to levy," he said.

Liu said China's move is aiming to offset potential negative influences on domestic economic growth and stabilize market sentiment.

A spokesperson from the Ministry of Commerce said the date of implementation of the tariff measures will depend on the actions of the US, and China reserves the right to introduce other countermeasures.

China believes consultation based on respect, equality and mutual benefit is the effective way to resolve trade disputes, and any unilateral threat or blackmail will only cause damage to the interests of all parties, according to the ministry.

The ministry reiterated that since the US has ignored the interests of companies and consumers in both countries, China has to take the necessary countermeasures to safeguard the dignity and interests of its people, defend free trade and the multilateral system, and ensure the common interests of all the countries of the world.

In light of the possible increase of the additional duty rate to 25 percent, the US Trade Representative said that the close of the written comment period has been extended from August 30 to September 5, and the due date for requests to appear at the public hearing is extended to August 13.

Xu Hongcai, an economist with the China Center for International Economic Exchanges, said: "Even though the US industrial system is large and comprehensive in general, its manufacturing and consumer sectors have had much reliance on imports for many years. It won't be easy for the country to find alternatives to imports from China, because China still has advantages in price, supply chain and technologies."