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China announces $60B of U.S. goods for tariff retaliation

How trade war could impact businesses

China on Friday announced a $60 billion list of U.S. goods including coffee, honey and industrial chemicals that would be subject to retaliation if Washington goes ahead with its latest tariff threat.

"China is forced to take countermeasures," said a Finance Ministry statement, which accused the Trump administration of damaging the global economy after it proposed hiking duties on $200 billion of Chinese goods in the second round of a dispute over technology.

Retaliatory duties of 25 percent, 20 percent, 10 percent or 5 percent will hit 5,207 products "if the U.S. side persists in putting its tariff measures into effect," China's statement said. Earlier Friday, a China foreign ministry spokesman appealed to Washington to negotiate but could not confirm reports the two sides were setting up talks. "We urge the United States to come to its senses, correct its erroneous acts and create the necessary condition for a proper settlement as soon as possible," spokesman Geng Shuang said.

The escalating dispute, with no settlement in sight, has fueled fears it might chill global trade and economic growth. Washington imposed 25 percent duties on $34 billion of Chinese goods on July 6 in response to complaints that Beijing steals or pressures companies to hand over technology. Beijing retaliated by imposing similar charges on the same amount of U.S. products.

China's imports from the United States last year totaled $153.9 billion. After the earlier action against $34 billion of U.S. goods, that left about $120 billion available for retaliation.  Beijing is running out of products to hike duties on due to its lopsided trade balance with the United States--reflected in Friday's threat targeting a smaller amount of U.S. goods.

The highest penalties in Friday's list would be imposed on honey, vegetables, mushrooms and chemicals, targeting farming and mining areas that supported President Donald Trump in the 2016 election. The list included products as varied as snow blowers and 3-D printers. Beijing's earlier round of tariffs appeared designed to minimize the impact on the Chinese economy by targeting soybeans, whiskey and other goods available from Brazil, Australia and other suppliers. 

Why a trade war with China is dangerous for the U.S.

Chinese leaders have offered to narrow their politically sensitive trade surplus with the United States by purchasing more American goods. But they have rejected changing technology development plans they see as a path to prosperity and global influence. 

Trump earlier proposed 10 percent tariffs on an additional $200 billion of Chinese imports, but he told trade officials this week to consider raising that to 25 percent. Chinese authorities warned earlier that if the dispute escalated, they would adopt unspecified "comprehensive measures." That prompted concern among American companies that retaliation might expand to disrupting their operations in China.

The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's technology development tactics hurt American companies.

Trump's tariffs target goods the White House says benefit from industrial policies such as "Made in China 2025," which calls for developing Chinese competitors in robotic, artificial intelligence and other fields. China's trading partners complain those might violate its market-opening pledges by subsidizing or shielding Chinese companies from competition.

The dispute is part of broader U.S. complaints about global trading conditions that have prompted Trump to raise duties on steel, aluminum, washing machines or solar panels from Canada, Europe, Japan and South Korea.