BEIJING, July 6, 2018 (News Wires) - The United States and China hiked tariffs Friday on billions of dollars of each other's goods, launching what Beijing called the "biggest trade war in economic history" in a spiraling dispute over technology. The Trump administration is confronting Beijing over development tactics it says include stealing or pressuring foreign companies to hand over technology. American officials worry Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence will erode US industrial leadership. Washington imposed 25 per cent duties on $34 billion of imports from China in the first in a possible series of increases that President Donald Trump says could affect up to $550 billion of Chinese goods. The Chinese Foreign Ministry said "retaliatory tariffs" took effect. The Communist Party newspaper People's Daily said they were imposed on a $34 billion list of goods issued last month that included soybeans, pork and electric vehicles. Washington has "ignited the biggest trade war in economic history," said a Commerce Ministry statement. Companies worry the spiraling dispute could chill global economic growth. Chinese exporters have reported US orders fell off ahead of the tariff hike. But Asian financial markets took Friday's developments in stride. Japan's main stock index, the Nikkei 225, gained 1.1 percent while the Shanghai Composite Index added 0.5 per cent. Hong Kong's Hang Seng also rose 0.5 per cent. The conflict between the world's two biggest economies reflects chronic tension in their relationship as customers, business partners and increasingly as competitors. It also is rooted in the clash between American notions of free trade and Beijing's state-led development model. China's ruling Communist Party has insisted on making changes at its own pace while sticking to state-directed technology development seen as the path to prosperity and global influence. Beijing has announced reforms this year including ending limits on foreign ownership in its auto industry, but none directly addresses complaints that are fueling its conflict with Washington. On Thursday, Trump said higher tariffs on an additional $16 billion in Chinese goods were set to take effect in two weeks. After that, the hostilities could intensify: Trump said Washington is ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing does not yield. That would bring the total of targeted Chinese goods to $550 billion - more than the $506 billion in goods that China shipped to the United States last year. Chinese officials reject accusations they steal or force foreign companies to hand over technology. But rules on auto manufacturing and other industries do require companies to work through state-owned partners, obliging them to share know-how with potential competitors.
