China files WTO challenge to USA $200B tariff plan
- Author: Sonia Alvarado Jul 17, 2018,
Jul 17, 2018, 1:29
Forecasters say if the first USA round of tariffs, implemented on 6 July, is expanded to cover another $200bn of goods as Trump has threatened, China's economy could lose 0.4 percentage points, according to HSBC estimates.
Analysts polled by Reuters had expected gross domestic product (GDP) to expand 6.7 percent in the April-June quarter, slowing only marginally from 6.8 percent growth in the previous three quarters. Even before the trade dispute with Washington erupted, forecasters expected growth to cool after Beijing started tightening controls on bank lending past year to rein in surging debt.
Mao Shengyong, a spokesman for China's National Bureau of Statistics said the economy's growth was stable but "the uncertainties of the external environment are mounting".
European Council President Donald Tusk has urged the United States, Russia, and China to avoid starting trade wars that could threaten the global order and endanger world peace.
European envoys say they have sensed a greater urgency from China since a year ago to find like-minded countries willing to stand up against Trump's "America First" policies.
Tusk warned in Beijing that trade tensions could spiral into a "hot conflict".
Washington imposed 25% tariffs on 34 billion dollars (£25.7 billion) of goods in response to complaints that Beijing is hurting American companies by stealing or pressuring enterprises to hand over technology. Beijing retaliated with similar penalties on the same amount of US imports. Things are set to escalate even further after Trump threatened to add more tariffs to $200 billion of Chinese imports including fish sticks, fruit, vegetables and coal.
"Not to start trade wars, which turned into hot conflicts so often in our history, but to bravely and responsibly reform the rule-based worldwide order".
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China's lopsided trade balance means it will run out of United States imports for penalty tariffs before Washington does.
More broadly, anxiety about tariffs "is already dampening business confidence and delaying investment", said Louis Kuijs of Oxford Economics in a report. There is still time to prevent conflict and chaos. "Thanks to the new economy, China managed to sustain a stronger growth momentum", said Raymond Yeung, chief greater-China economist for Australia & New Zealand Banking Group Ltd.in Hong Kong.
China is the No. 1 trading partner for its Asian neighbors and buys oil, iron ore and other raw materials from Australia, Brazil and elsewhere.
Fixed-asset investment grew 6 percent year on year in the first half, lower than 7.5 percent in the first quarter.
The mining industry posted 1.6 percent year-on-year growth in the value-added output; manufacturing rose 6.9 percent; and electricity, heat, gas and water production and supply industry advanced by 10.5 percent. But that has swelled debt, prompting concerns about risks to the banking system.
China's exports to the United States rose 13.6 percent in the first half of 2018 from a year earlier, while its imports from the USA rose 11.8 percent in the same period. The increase was driven by rapid growth in the sales of higher-end consumer goods such as cosmetics and audio-video equipment.
Long accused of protectionist tactics that make it a hard place for foreign firms to operate, China is trying to reverse that narrative amid the escalating trade war by approving huge investments, such as a US$10 billion petrochemicals project by Germany's BASF.