China hits back against latest US tariffs, but leaves door open to talks

China has pushed back against the latest US tariffs with a flurry of measures, but its response remains well-calibrated, say analysts, further signalling its intent to leave the door open to talks.

- Aw Cheng Wei Joyce ZK Lim

BEIJING -

New duties of 10 per cent and 15 per cent will be imposed on US agricultural products from cotton to soya beans to chicken from March 10, China's ministries of finance and commerce announced on March 4.

Fifteen US firms, including those in defence technology, were added to China's export control list, and will need special approval to receive shipments of "dual-use" items that have both civilian and military applications.

Ten other US firms were added to an "unreliable entity list", banning them from trading with China or making any new investments in the country.

On top of these measures, China said later on March 4 that it was suspending soya bean imports from three US companies as well as log imports from the US, citing beetles in shipments.

The Chinese authorities also announced the start of a probe into US fibre-optic products — the first of its kind in China — after receiving complaints that American firms were circumventing anti-dumping measures.

China's latest moves come swiftly after US President Donald Trump confirmed that a fresh round of 10 per cent duties will be slapped on Chinese goods, effective from March 4, adding to an initial 10 per cent tariff hike that kicked in from February.

Analysts told The Straits Times that China's latest response was as measured as its earlier reaction, underlining how it remained open to negotiations with the US.

Ms Erica Tay, Maybank's director of macro research, said China's latest countermeasures seem designed to "inflict minimal pain on the domestic (Chinese) economy by choosing products where there are abundant substitutes".