Financial Times: China and US in Trade Battle

Trade adds jobs and profits, and tariffs increase prices, reducing jobs and profits. Hours after the Trump administration announced a 25 percent tariff on 1,333 Chinese products including robots and locomotives, China responded with tariffs on 106 products imported from the United States. The United States claims decades of intellectual property theft from China, and China points to US violations of World Trade Organization rules. Each country is targeting tariffs to specific areas. “Robert Lighthizer, the US trade representative, said in a statement that the list of products was designed to target Chinese industrial policies, including President Xi Jinping’s ‘Made in China 2025’ call to establish a world-leading presence in sectors such as robotics and high-speed rail,” reports the Financial Times. “Lighthizer said the list had been refined to remove products that would cause disruptions to the US economy or harm US consumers.” Earlier, the US set tariffs on steel and aluminum and China responded with tariffs on fruit, wine and pork, hitting farmers who had supported Trump. The US will hold a public hearing and gather public comments before the tariffs go into effect. Only then would China's tariffs go into effect. Trump is trying to reduce the $375.2 billion US trade deficit in goods with China. The US has a smaller trade surplus on services. – YaleGlobal