China on Wednesday announced an increase in tariff on $50 billion (Rs 3.25 lakh crore) worth of American goods, including soybeans, aircraft and automobiles, a day after the United States announced its plan to raise tariffs on a similar amount of Chinese goods, Reuters reported. The Chinese government’s decision saw shares decline in global stock markets.
“The assumption was China would not respond too aggressively and avoid escalating tensions,” Julian Evans-Pritchard, the Senior China Economist at consultancy company Capital Economics, said. “China’s response is a surprise for some people. It is more of a game of brinkmanship, making it clear what the cost would be, in the hopes that both sides can come to [an] agreement and none of these tariffs will come into force.”
China’s Commerce Ministry said the US move was a violation of global trade rules and claimed that Beijing was acting to protect its “legitimate rights and interests”, CBS News reported. US Ambassador to China Terry Branstad told the news channel that he does not want a trade war. “I want to see us work together to resolve these problems,” he said.
While Washington’s list is filled with a number of obscure industrial products, China’s list contains a number of important US export items, including soybeans, frozen beef, cotton and other agricultural commodities that are produced in states such as Iowa and Texas, which voted for Donald Trump in the 2016 presidential elections.
China imposed tariffs on 128 American products worth around $3 billion (Rs 19,560 crore) on April 2 in response to the US imposing duties on steel and aluminium imports from China as part of Trump’s “America First” policy.