China to hit US soybeans, cars, planes with retaliatory tariffs

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U.S. stocks opened sharply lower on Wednesday after China announced plans for heavy tariffs on $50 billion worth of USA exports.

On Wednesday, China said it would levy 25 percent tariffs on imports of 106 USA products including soybeans, automobiles, chemicals, and aircraft, in response to proposed American duties on its high-tech goods including industrial robots, electric cars, locomotives and jet engines.

Aircraft and soybeans were China's biggest USA imports by value past year. "That is not viable", Chinese Vice Commerce Minister Wang Shouwen told media briefing here today when asked about Trump's demand.

The Trump administration's threats against China, including the two probes, don't lead to tangible action over the rest of 2017 as Trump shows restraint amid a budding relationship with his Chinese counterpart Xi Jinping.

Foreign companies are increasingly alarmed by initiatives such as Beijing's long-range industry development plan, dubbed "Made in China 2025", which calls for creating Chinese global leaders in electric cars, robots and other fields.

Chinese policies "coerce American companies into transferring their technology" to Chinese enterprises, said a statement by the U.S. Trade Representative. It added that trade between China and the United States now contributes to about 15 percent of its cargo volumes.

China had imposed tariffs on 128 US imports worth United States dollars 3 billion, including meat, fruit and pork, as retaliation against taxes approved by US President Donald Trump on imported steel and aluminium.

USTR said the public can submit written comments on the tariffs until May 11, and it will hold a public hearing on them on May 15 in Washington. Supporters and opponents began weighing in as soon as the list was released. The Commerce Ministry's statement Wednesday criticized the latest moves as "a typical unilateralist and protectionist practice".

These large, global US companies do a lot of business in China and overseas, which makes their sales and profits vulnerable if the two countries can't work out a deal before the threatened tariffs, which are still under review, go into effect.

China understandably condemned the USA move saying it would take up the matter with the World Trade Organisation and take "corresponding measures of equal scale and strength against U.S. products".

Industries including aerospace, information and communications technology, robotics and machinery were among those targeted by the U.S. Trade Representative on Tuesday.

Egg-cellent adventure at Wilmington Community Egg Hunt
The Easter Bunny was also in attendance to take photos with children, some slightly tired while others were quite alert. The weekly event has led to the annual Easter egg hunt and pancake breakfast held Saturday morning at the church.

The US move "severely infringed on the legitimate rights and interests that China enjoys in accordance with the WTO rules, and threatened China's economic interests and security", the MOC said. But some critics warned that Americans will end up being hurt.

David Podruzny, vice-president business and economics at the association, said the impact will take awhile because most of the production is under contract.

According to an analysis by Bloomberg News, the list of Chinese products targeted for a 25 percent tariff appear to have been chosen with care.

"The tariff certainly changes the landscape a little bit but China still remains a very viable market for Canadian exports", said Marcus Mattinson, spokesman for the Canadian Meat Council. "We hope that the USA side, with sense and long-term picture in mind, refrain from going further down the wrong path".

Another tech industry insider told Reuters: "It's possible the reason is that the usa companies will be damaged by this and the government is taking that into account".

On April 3, President Trump alleged China forged a $500 billion trade deficit with the US, just days after the two countries hit each other with tariffs.

Cotton represents another significant flow of trade from the US: exports of fiber in its raw form fetched $5.8 billion past year, government data show.

American companies have long chafed under Chinese regulations that require them to operate through local partners and share technology with potential competitors in exchange for market access. "The reason probably is that too much is at stake, namely, China's ability to compete with the U.S. as it moves up the technological ladder", the economists write. But similar promises in the past have gone unmet. In late March, the real estate mogul announced tariff hikes of 25% on steel and 10% on aluminum that American manufacturers have slammed as increasing their production costs. This was in response to the USA decision to impose 25% duty on steel and aluminium products sourced from a group of producers, including China.

The new tariffs imposed by China are likely to have a significant impact on American farmers and the agricultural industry.

But Commerce Secretary Wilbur Ross is brushing off concern over trade war with China.

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