China hammers U.S. goods with tariffs as 'sparks' of trade war fly

China has increased tariffs by up to 25 per cent on 128 U.S. products including frozen pork, wine and certain fruits and nuts, escalating a spat between the world's biggest economies in response to U.S. duties on imports of aluminum and steel.

China puts extra tariffs of up to 25% on 128 U.S. products

China responded to Trump's announced plans to impose tariffs on products, including Chinese steel, with additional tariffs on U.S. products, including pork. (Nati Harnik/Associated Press)

China has increased tariffs by up to 25 per cent on 128 U.S. products including frozen pork, wine and certain fruits and nuts, escalating a spat between the world's biggest economies in response to U.S. duties on imports of aluminum and steel.

The tariffs, to take effect on Monday, were released late on Sunday and match a list of potential tariffs on up to $3 billion US in U.S. goods published by China on March 23.

Soon after the announcement, an editorial in the widely read Chinese tabloid Global Times warned that if the U.S. had thought China would not retaliate or would only take symbolic counter-measures, it can now "say goodbye to that delusion. 

"Even though China and the U.S. have not publicly said they are in a trade war, the sparks of such a war have already started to fly," the editorial said.

Escalating trade tensions

China's Ministry of Commerce (MOFCOM) said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 U.S. goods, including fruit. The tariffs on those products will be raised by an extra 15 per cent.

Eight other products, including pork and scrap aluminum, will now be subject to additional tariffs of 25 per cent, it said, with the measures effective from April 2.

In this March 26, 2018 photo, farmer Brad Te Grootenhuis, right, sits with morning crowd regulars at the Boxcars Cafe in Hospers, Iowa. Te Grootenhuis sells about 25,000 hogs a year, and stands to lose hundreds of thousands of dollars in potential revenue because of the new tariffs. (Nati Harnik/Associated Press)

"China's suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China's interests," the Chinese finance ministry said.

The retaliatory tariffs came amid escalating trade tensions between Beijing and Washington, which have rocked global financial markets in the past week as investors feared a full-blown trade spat between two countries will be damaging for world growth.

Pandora's box

U.S. President Donald Trump is separately preparing to impose tariffs of more than $50 billion on Chinese goods intended to punish Beijing over U.S. accusations that China systematically misappropriated American intellectual property — allegations Beijing denies.

China has repeatedly promised to open its economy further, but many foreign companies continue to complain of unfair treatment.

U.S. President Donald Trump holds his signed memorandum on intellectual property tariffs on high-tech goods from China, at the White House last month. (Jonathan Ernst/Reuters)

China warned the United States on Thursday not to open a Pandora's box and spark a flurry of protectionist practices across the globe.

"There are some people in the West who think that China looks tough for the sake of a domestic audience, and would easily make concessions in the end," the Global Times editorial said. "But they are wrong."

The Global Times is run by the ruling Communist Party's official People's Daily, although its stance does not necessarily reflect Chinese government policy.

In a statement published on Monday morning, MOFCOM said the United States had "seriously violated" the principles of non-discrimination enshrined in World Trade Organization rules, and had also damaged China's interests.

"China's suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organization," it said, adding that differences between the world's two largest economies should be resolved through dialogue and negotiation.