BEIJING: China fired back on Saturday in a spiralling trade dispute with US President Donald Trump by raising import duties on a $34-billion list of American goods including soybeans, electric cars and whiskey.
The government said it was responding in "equal scale" to the tariff increases Trump announced on Friday on Chinese goods in a conflict over Beijing's trade surplus and technology policies.
Businesses in both countries, but especially the US, are growing increasingly concerned that the dispute could escalate further and chill global economic growth.
China "doesn't want a trade war" but has to "fight back strongly", the Commerce Ministry said in a statement. It said Beijing also was scrapping agreements to narrow its multibillion-dollar trade surplus with the United States by purchasing more American farm goods, natural gas and other products.
The United States and China have the world's biggest trading relationship but official ties are increasingly strained over complaints Beijing's industry development tactics violate its free-trade pledges and hurt American companies.
Europe, Japan and other trading partners raise similar complaints, but Trump has been unusually direct about challenging Beijing and threatening to disrupt such a large volume of exports.
"In this trade war, it's the US who is playing the role of provocateur, while China plays defence," said the Global Times, a newspaper published by the ruling Communist Party. "China is a powerful guardian and has enough ammunition to defend existing trade rules and fairness."
Beijing will impose an additional 25% tariff starting from July 6 on 545 products from the United States including soybeans, electric cars, orange juice, whiskey, lobsters, salmon and cigars, according to the Ministry of Finance.
Most are food and other farm goods, hitting Trump's rural supporters hardest.
Beijing appeared to be trying to minimise the impact on its own economy by picking US products that can be replaced by imports from other suppliers such as Brazil or Australia.
Chinese regulators also are considering tariff increases on an additional 114 products including medical equipment and energy products, the Finance Ministry said. It said a decision would be announced later.
That mirrored the Trump administration's announcement on Friday of tariff increases on $34 billion in Chinese goods, also due to take effect from July 6, and plans to consider widening it to an additional $16 billion worth of other products.
China's heavily regulated economy also gives the ruling Communist Party additional options for retaliation by withholding approval for business activity.
Anti-monopoly regulators are believed to have delayed announcing a decision on the US tech giant Qualcomm's proposed acquisition of the semiconductor maker NXP in part due to the tariff conflict. Other companies say the approval process for licences has slowed down.
"China's retaliation will remain calibrated and largely reciprocal, with President Xi Jinping ready to counter any move by Trump," said Eurasia Group in a report. "Beijing has a freer hand for informal retaliation, which will now start to increase."
The American Chamber of Commerce had appealed to Washington to avoid a tariff war but said Trump's threat has prompted Beijing to engage in more intensive negotiations than it had in recent years.
Companies also are watching the fate of ZTE Corp, a Chinese maker of telecoms equipment that ran afoul of US regulators after it violated restrictions on exports of American technology to Iran and North Korea.
Washington rescinded a ban on sales of US technology to ZTE after the company agreed to pay a $1-billion fine and hire American-picked compliance managers. The agreement allows Washington to impose an additional $400 million fine or other penalties if ZTE violates the deal.
Trump is pressing Beijing to narrow its trade surplus with the United States and roll back its plans for state-led development of Chinese global competitors in technology fields including electric cars, renewable energy, artificial intelligence and biotechnology.
The US, Europe, Japan and other trading partners complain Beijing's tactics including outright theft of foreign technology and subsidies and protection from competition for fledgling Chinese industries. They say those violate Chinese market-opening commitments under the World Trade Organization.
Tensions eased temporarily after Chinese negotiators agreed at talks in Washington in May to buy more American farm goods, natural gas and other products. American officials said they would suspend threatened tariff increases on up to $150 billion in Chinese goods.
The dispute revived after the White House renewed its plan for a tariff hike on $50 billion of Chinese goods as part of the technology dispute. The Chinese government warned after another round of talks on June 3 that it would discard those deals if the tariffs went ahead.
Businesspeople and economists say Chinese leaders are less likely to compromise on technology. They view plans for state-led development of companies capable of competing globally in fields including electric cars, renewable energy and biotech as a route to prosperity and to restore China to its rightful role as a world leader.
"There isn't one country who would give up their rights to advance technology and make industrial upgrades," said the Global Times editorial.
Beijing also has announced plans to cut import duties on autos and some consumer goods and to ease limits on foreign ownership in auto manufacturing, insurance and some other industries, though those don't directly address US complaints.
On Thursday, a Commerce Ministry spokesman said some exporters were rushing to fill orders due to concern trade conditions might change, but said they were "not the mainstream".