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U.S. To put tariffs on $50 billion in Chinese goods as trade fight widens

WASHINGTON — The Trump administration said Friday that it would move ahead with imposing tariffs on $50 billion of Chinese products, prompting vows of retaliation from Beijing and turning a spat into a full-blown trade war between the world’s two largest economies.

It comes after the president ignited trade spats on numerous fronts, including levying tariffs on metal imported from allies and adversaries around the globe and sparring with Canada and Mexico over the future of the North American Free Trade Agreement.

The penalties against imports from China will come in two tranches. Tariffs on roughly $34 billion of Chinese products — drawn from a list that the administration published in April and vetted through a series of hearings in mid-May — will go into effect on July 6, the office of the U.S.

Trade Representative said. The administration is also proposing a new list of tariffs on roughly $16 billion of products, which it said would undergo further review, including public hearings.

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In a statement, Trump said that trade between the countries had been “very unfair, for a very long time,” and that the United States would pursue additional tariffs if China retaliates.

The tariffs will fall on 1,102 categories of Chinese goods, a list that generally focuses on industrial sectors that relate to the country’s Made in China 2025 plan for dominating high-tech industries, like aerospace, automobiles, industrial machinery, information technology and robotics, the administration said. Goods commonly purchased by American consumers, like mobile phones and televisions, won’t be taxed.

The White House says its measures are necessary to reset the trade relationship with China, a country they accuse of gaming economic rules and costing millions of U.S. jobs.

But the prospect of a trade war between the two economies has sparked concern from businesses, many of which depend on access to China’s market, as well as investors and consumer groups. Economists say the levies will both drive up prices for U.S. consumers purchasing products at retail stores and for businesses that depend on China for parts used to make other goods in the United States.

That would potentially dampen economic growth that has been stoked by the administration’s tax cuts.

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“Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers and ranchers,” said Thomas J. Donohue, president of the U.S. Chamber of Commerce. “This is not the right approach.”

The plan to proceed with tariffs has split the president’s closest advisers, some who believe they are necessary measures to force China to reform, and others who fear the fallout from a trade war and have been pushing for a negotiated solution.

For weeks, the administration appeared to be shying away from an open confrontation as China assisted the White House in preparing for a summit with North Korea, while Treasury Secretary Steven Mnuchin and other advisers said talks were progressing toward a deal.

China offered the United States a package of purchases of agricultural and energy products that would reach nearly $70 billion in the first year, although that was conditional on the U.S. lifting its threat of tariffs.

At the personal request of Chinese President Xi Jinping, the Trump administration altered a penalty to extend a lifeline for ZTE, a Chinese telecom firm that had been bankrupted by U.S. sanctions.

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But the announcement that the White House would pursue tariffs Friday appears to be a victory for the more hard-line faction of the Trump administration, including Trade Representative Robert E. Lighthizer and trade adviser Peter Navarro, who balked when Mnuchin declared last month that tariffs would be suspended while negotiations continued.

Tensions could escalate further in the coming weeks.

The White House is formulating a plan for restricting Chinese investments in the United States and putting stricter limitations on the types of advanced technology that can be exported to the country.

It has said those restrictions will go into effect shortly after they are announced by June 30.

This article originally appeared in The New York Times.

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ANA SWANSON © 2018 The New York Times

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