Brussels: The world economy lurched closer to an all-out trade war as the Trump administration accused China of threatening US economic interests and as the European Union made good on its threat to hit American goods with retaliatory tariffs.
A scathing report, posted late Tuesday by the White House, blamed Beijing for hijacking intellectual property and pursuing destructive industrial policies, saying the nation's spectacular economic growth "has been achieved in significant part through aggressive acts, policies and practices that fall outside of global norms and rules", report Agencies."Given the size of China's economy and the extent of its market-distorting policies, China's economic aggression now threatens not only the US economy, but also the global economy as a whole," according to the 35-page document.
The White House report came out just before the EU triggered the first phase of retaliation against the US over its metal-import tariffs, approving a 25 per cent duty on 2.8 billion euros (S$4.4 billion) of US products including Harley-Davidson motorcycles and Levi Strauss & Co jeans.
The duties are due to be published in the Official Journal on Thursday and will take take effect on Friday.
It opens up a second contentious trade front for US President Donald Trump, who on Monday ordered US officials to consider imposing tariffs on an additional US$200 billion in Chinese imports - with another US$200 billion to be added if Beijing retaliates. The EU countermeasures will hit US consumer, agricultural and steel products in many key Republican constituencies, putting pressure on Mr Trump ahead of crucial midterm elections in November.
"We did not want to be in this position," European Trade Commissioner Cecilia Malmstrom said in a statement on Wednesday.
"But the unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice."The EU countermeasures cover a total of around 200 categories of US products also including various types of corn, rice, orange juice, cigarettes, cigars, T-shirts, cosmetics, boats and steel. The EU is reserving the right to target more US products with further duties no later than March 23, 2021.
Second-stage retaliation would involve levies ranging from 10 per cent to 50 per cent on an extra 3.6 billion euros of American goods imported into the EU.
On the other side of the Pacific, economists are starting to run the numbers on what kind of dent to growth such actions will have on China's economy.