In this July 4, 2018, photo, a robot from Chinese search company Baidu welcomes visitors to a developer event in Beijing, China. (AP Photo/Ng Han Guan)

US-China kick off ‘biggest trade war in economic history’

The Trump administration contends China has deployed predatory tactics in a push to overtake U.S. technological dominance.

The United States and China launched what Beijing called the “biggest trade war in economic history” Friday, imposing tariffs on billions of dollars of each other’s goods amid a spiraling dispute over technology.

The Trump administration is confronting China over development tactics it says include stealing technology or pressuring foreign companies to hand it over. American officials worry U.S. industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence.

Washington imposed 25 per cent duties on $34 billion of imports from China, the first in a series of possible increases that President Donald Trump says could affect up to $550 billion of Chinese goods, more than the total amount China exported to the U.S. last year.

The first round targets Chinese industrial goods, not consumer products, in an attempt to limit the impact on U.S. households, but companies that rely on Chinese-made machinery or components may eventually have to pass along increased costs to customers.

The Chinese Foreign Ministry said “retaliatory tariffs” also took effect, but provided no other details. The Communist Party newspaper People’s Daily said tariffs were imposed on a list of goods issued last month that included soybeans, pork and electric vehicles. U.S. soybean farmers have been particularly concerned, and the price of soybeans has plunged 17 per cent over the past month on tariff fears.

Washington has “ignited the biggest trade war in economic history,” said a Commerce Ministry statement.

Related: Trump complains about “STUPID TRADE” with China

Related: Trudeau thanks Canadians for standing up for each other

During an official visit to Bulgaria, China’s No. 2 leader, Premier Li Keqiang, said “no one will win by fighting a trade war, yet China will take countermeasures in the face of unilateral moves.”

Companies worry the dispute could chill global economic growth, but Asian financial markets took Friday’s developments in stride.

Japan’s main stock index, the Nikkei 225, gained 1.1 per cent while the Shanghai Composite Index added 0.5 per cent. Hong Kong’s Hang Seng also rose 0.5 per cent.

The conflict between the world’s two biggest economies reflects chronic tension in their relationship as customers, business partners, and increasingly competitors. It also is rooted in the clash between American notions of free trade and Beijing’s state-led development model.

China’s ruling Communist Party has insisted on making changes at its own pace while sticking to state-directed technology development seen as the path to prosperity and global influence. Beijing has announced reforms this year including ending limits on foreign ownership in its auto industry, but none directly addresses complaints that are fueling its conflict with Washington.

On Thursday, Trump said higher tariffs on an additional $16 billion in Chinese goods were set to take effect in two weeks.

After that, the hostilities could intensify: Trump said Washington is ready to target an additional $200 billion in Chinese imports — and then $300 billion more — if Beijing does not yield.

That would bring the total of targeted Chinese goods to $550 billion — more than the $506 billion in goods that China shipped to the United States last year.

Chinese officials reject accusations they steal or force foreign companies to hand over technology. But rules on auto manufacturing and other industries require companies to work through state-owned partners, obliging them to share know-how with potential competitors.

Other governments express similar complaints toward Beijing, but Washington has alienated potential allies by raising import duties on steel, aluminum and autos from Europe, Canada, Mexico and Japan. Some have responded by hiking their own tariffs on U.S. goods.

Trump’s confrontational outlook applies to other trading partners as well as China, said Tai Hui, chief strategist for JP Morgan Asset Management, in a report.

“This is a potential concern for the outlook of corporate investment and consumption around world,” Hui said.

The official China Daily newspaper accused the Trump administration of “behaving like a gang of hoodlums.” It said they would damage the global economy unless other countries stop them.

“There should be no doubting Beijing’s resolve,” the newspaper said.

Forecasters say global economic growth could be reduced by up to 0.5 percentage points in 2019-20 if both sides wind up raising tariffs on $250 billion of imports.

The American Chamber of Commerce in China appealed to both sides to negotiate.

“There are no winners in a trade war,” the chamber’s chairman, William Zarit, said in a statement. Companies want fairer treatment but will be hurt by U.S.-Chinese tensions, Zarit said. “We urge the two governments to come back to the negotiation table.”

___

Wiseman and Superville reported from Washington. AP Writer Catherine Lucey on Air Force One contributed.

Joe McDonald, Paul Wiseman And Darlene Superville, The Associated Press

Like us on Facebook and follow us on Twitter.

Just Posted

Living with obsessive compulsive disorder

The Big Read: Vancouver Island mom calls for more mental health services as son battles OCD

T.W. Paterson column: From ‘Old Dobbin’ to ‘King Gasoline’ — to bust

The late Jack Fleetwood loved to tell how he and his brother Doug bought six used cars — for $10!

Special weather statement forecasts hot weekend ahead on mid Island

Environment and Climate Change Canada advises residents in Nanaimo and Duncan to take precautions

Readers have plenty to say about Greyhound putting on the brakes

“It is a sad day for a once proud company”

Accused takes stand in trial for fatal crash in Yellow Point

Dustin Dennis Zinter represents self, testifies in B.C. Supreme Court in Nanaimo

France doubles up Croatia 4-2 to win World Cup

Played in Moscow Russia, latest Fifa World Cup marks the highest scoring final since 1966

B.C. VIEWS: Making private health care illegal again

Adrian Dix battles to maintain Cuba-style medical monopoly

Almost every part of Canada’s largest national park deteriorating: federal study

Drawing on decades of research — the report lists 50 pages of citations

Activists protest outside Kinder Morgan terminal in kayaks, canoes

Tsleil-Waututh elder Ta’ah Amy George led the water ceremony from a traditional Coast Salish canoe

Canadian soccer fans brace for World Cup final between France, Croatia

First ever final for the Croatians, while it’s France’s third, going into match as betting favourite

B.C. Lions claw their way back to score 20-17 victory over Winnipeg Blue Bombers

The Bombers, who beat the Lions 41-19 last week in Edmonton, fell to 2-3 with the loss

High winds, lack of rain suggest no breaks in sight for B.C. wildfire season

There were 11 new wildfires across the province over 24 hours, BC Wildfire Service officials say

UPDATE: Motorcyclist dies as fire, crash happen at same time on Vancouver Island highway

Young male motorcycle rider collides with one vehicle, then struck by another in Nanaimo

Former B.C. flight attendant protests sexual harassment outside YVR, asked to leave

Mandalena Lewis said she was handing out pamphlets outside YVR terminal when asked to leave

Most Read