BEIJING/WASHINGTON (Reuters) - China hit back quickly on Wednesday against U.S. plans to impose tariffs on $50 billion in Chinese goods, retaliating with a list of similar duties on key American imports including soybeans, planes, cars, beef and chemicals in a move that sent global markets lower.
Beijing responded after U.S. President Donald Trump’s administration targeted 25 percent tariffs on some 1,300 Chinese industrial technology, transport and medical products, acting less than 11 hours later in a sharp escalation of the trade dispute between the world’s two economic superpowers.
U.S. President Donald Trump, who contends his predecessors served the United States badly in trade matters, rejected the notion that the tit-for-tat moves amounted to a trade war.
“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” he wrote on Twitter early on Wednesday.
(For a graphic on U.S. imports from China, click tmsnrt.rs/2FMsz1Q)
The trade actions will not be carried out immediately, so there may be room for maneuver. Publication of Washington’s list starts a period of public comment and consultation expected to last around two months. The effective date of China’s moves depends on when the U.S. action takes effect.
Trump’s top economic adviser, Larry Kudlow, and U.S. Commerce Secretary Wilbur Ross both held out the possibility of talks to resolve the matter. Asked by reporters outside the White House whether the United States could lose a trade war, Kudlow said, “No. I don’t see it that way. This is a negotiation, using all the tools.”
Ross told CNBC it would not be surprising if negotiations ensued, but did not say when this might happen.
The latest trade moves unnerved investors and sent shivers through global stock markets and commodities. [MKTS/GLOB]
Shares in U.S. exporters of everything from food to planes were hammered by Beijing’s list of duties on key U.S. imports, including agricultural products, planes and chemicals.
At midday in New York, shares of aerospace giant Boeing Co, the single largest U.S. exporter to China, tumbled 2.7 percent, agricultural machinery maker Deere & Co slipped 4.4 percent and Caterpillar fell 1.8 percent.
The Dow Jones Industrial Average was down 0.56 percent as big U.S. manufacturers and chipmakers bore the brunt, while the S&P 500 fell 0.29 percent. The U.S. dollar also fell and oil dropped to a two-week low.
While Washington targeted products that benefit from Chinese industrial policy, including its “Made in China 2025” initiative to replace advanced technology imports with domestic products in strategic industries such as advanced IT and robotics, Beijing’s appeared tailored to inflict political damage.
While Washington’s list was filled with many obscure industrial items, China’s list strikes at signature U.S. exports, including soybeans, frozen beef, cotton and other agricultural commodities produced in states from Iowa to Texas that voted for Trump in the 2016 presidential election.
The list extends