The Trump administration has announced a 25% tariff on 50 billion US dollars worth of Chinese imports, escalating a trade dispute between the world’s two largest economies.
President Donald Trump has vowed to clamp down on what he calls China’s unfair trade practices.
China has said that it will retaliate with 50 billion dollars in tariffs in response, rattling financial markets.
It comes in the aftermath of Mr Trump’s nuclear summit with North Korean leader Kim Jong Un and his push for China to maintain economic pressure on the North.
Mr Trump has already slapped tariffs on steel and aluminium imports from Canada, Mexico, Europe and Japan, drawing a rebuke from US allies.
In a statement, the president said: “The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices.”
The Office of the US Trade Representative said the tariffs will start to be collected on July 6.
Chinese foreign ministry spokesman Geng Shuang said that China’s response would be immediate and that Beijing would “take necessary measures to defend our legitimate rights and interests”.
Beijing earlier drew up a list of 50 billion dollars in US products that would face retaliatory tariffs, including beef and soybeans, a shot at Mr Trump’s supporters in rural America.
Mr Trump’s decision on the Chinese tariffs comes in the aftermath of his summit with North Korean leader Kim Jong Un.
The president has co-ordinated closely with China on efforts to get Pyongyang to eliminate its nuclear arsenal.
But he signalled that whatever the implications, “I have to do what I have to do” to address the trade imbalance.
Administration officials have signalled support for imposing the tariffs in a dispute over allegations that Beijing steals or pressures foreign companies to hand over technology, according to officials briefed on the plans.
Sorry, we cannot let our friends, or enemies, take advantage of us on Trade anymore. We must put the American worker first!
— Donald J. Trump (@realDonaldTrump) June 11, 2018
Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle US economic growth and undermine the benefits of the tax cuts Mr Trump signed into law last year.
“If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown,” Gary Cohn, Mr Trump’s former top economic adviser, said at an event sponsored by The Washington Post.
The Chinese have threatened to counterpunch.
For example, officials have said they would drop agreements reached last month to buy more US soybeans, natural gas and other products.
The US and China have been holding negotiations over the trade dispute.
The United States has criticised China for the aggressive tactics it uses to develop advanced technologies, including robots and electric cars, under its Made in China 2025 programme.
The US tariffs are designed specifically to punish China for forcing American companies to hand over technology in exchange for access to the Chinese market.
The administration is also working on proposed Chinese investment restrictions by June 30.
