Escalating US-China trade dispute heightens global concerns
WASHINGTON (AP) – An escalating trade dispute between the world's two biggest economies heightened fears Wednesday of a global trade war, sent global stock markets tumbling but also left the door open to a negotiated settlement that might prevent any serious damage before it begins.
The Dow Jones industrial average tumbled after markets fell in Europe and Asia on worries of an intensifying trade conflict between the United States and China.
After the United States unveiled plans to impose tariffs on $50 billion in Chinese imports Tuesday, China lashed back within hours, matching the American tariffs with plans to tax $50 billion of U.S. products, including soybeans and small aircraft.
The tariffs wouldn't kick in right away. The U.S. government is inviting public comment on its trade sanctions through May 11 and will hold a hearing on the plan May 15. And China set no date for its 25 percent duties to take effect, saying it is waiting to see what President Donald Trump does.
U.S. Commerce Secretary Wilbur Ross brushed off concern about a trade war. In an interview with CNBC on Wednesday morning, Ross said the tariffs announced by China amount to a mere 0.3 percent of America's gross domestic product. He added that some U.S. punitive action against Beijing has been "coming for a while" over what the United States calls China's predatory behavior involving technology.
"What we're talking about on both sides is a fraction of 1 percent of both economies," Ross said.
The larger concern, the commerce secretary said, is the protection of U.S. intellectual property.
Asked whether the U.S. tariffs against China were a negotiating ploy, Lawrence Kudlow, Trump's top economic adviser, said: "Potentially. It's part of the process. I would take the president seriously on this tariff issue. There are carrots and sticks in life... Both sides benefit by positive solutions that lower barriers."
Beijing's list of 106 products included the biggest U.S. exports to China, reflecting its intense sensitivity to the dispute over American complaints that it pressures foreign companies to hand over technology.
The clash reflects the tension between Trump's promises to narrow a U.S. trade deficit with China that stood at $375.2 billion in goods last year and the ruling Communist Party's development ambitions. Regulators use access to China's vast market as leverage to press foreign automakers and other companies to help create or improve industries and technology.