China hits back as US slaps duties on $34 bn worth of its goods

China accused the US of triggering the “largest-scale trade war” as the world’s two biggest economies sharply escalated their conflict.

In a statement issued shortly after the US deadline passed at 0401 GMT on Friday, China’s commerce ministry said it was forced to retaliate, meaning imported US goods, including cars, soybeans, and lobsters also faced 25 per cent tariffs.

China’s soymeal futures fell more than 2 per cent on Friday afternoon before recovering most of those losses, amid initial market confusion over whether Beijing had actually implemented the tariffs, which it later confirmed it had.

The slapping of the tariffs mark the failure of months of dialogue between the world's two largest economies. It also meets Trump’s campaign-trail pledge to work around Beijing’s underhanded economic treatment of the United States.

US officials accuse China of stealing the "crown jewels" of American technological know-how through cyber-theft, forced transfers of intellectual property, state-sponsored corporate acquisitions and other alleged practices to builds an emerging industrial dominance. 

Experts are of the view that if the tariff war ends at $34 billion, it will only have a marginal effect on both economies, but if it escalates to $500 billion then it’s going to have a big impact for both economies.

Friday’s tariff volley fuelled fears of an escalating battle that would ultimately give a big blow to global trade, investment and growth in both the US and in China.

“Trade war is never a solution,” Chinese Premier Li Keqiang said at a news briefing with Bulgarian Prime Minister Boyko Borissov in Sofia before a summit with 16 central and eastern European countries.

“China would never start a trade war but if any party resorts to an increase of tariffs then China will take measures in response to protect development interests.”