WASHINGTON (Reuters) — The United States and China on Thursday accused each other of economic coercion, as tit-for-tat trade actions complicated plans for a virtual summit between Presidents Joe Biden and Xi Jinping next week..
The world’s two largest economies have imposed tariffs on hundreds of billions of dollars of one another’s goods since 2018, when the Trump administration launched a trade war with China..
The Biden administration has maintained most of those tariffs while launching its own probes into China’s trade practices..
On Thursday, the U.S. Commerce Department accused China of unfairly subsidizing exports of steel and aluminum, opening the way for new tariffs..
China’s Ministry of Commerce on Thursday called on the United States to stop its “unilateral bullying” and said it would take “necessary countermeasures” to protect its interests..
The new trade tensions come as the United States and China are trying to find ways to cooperate on other issues, such as climate change and Iran’s nuclear program..
Biden and Xi are expected to hold a virtual summit next week, but it is unclear if the trade dispute will overshadow the talks..
“The trade relationship between the United States and China is one of the most important in the world, and it is in the interests of both countries to find a way to resolve their differences,” said Michael Hirson, a senior analyst at the Eurasia Group..
“However, the current climate of mistrust and finger-pointing makes it difficult to see how a breakthrough can be achieved.”.
The U.S. Commerce Department’s investigation found that China has been unfairly subsidizing its steel and aluminum exports by providing low-cost loans and tax breaks to its producers..
The department said that the subsidies have allowed Chinese producers to sell their products at below-market prices, harming U.S. producers..
The Commerce Department has proposed imposing new tariffs of up to 236% on certain Chinese steel products and up to 172% on certain Chinese aluminum products..
The tariffs would be in addition to the 25% tariffs that the Trump administration imposed on steel imports and the 10% tariffs that it imposed on aluminum imports from China in 2018..
China’s Ministry of Commerce said that the U.S. investigation was “groundless” and that the United States was “abusing” trade remedies..
The ministry said that the United States should stop its “unilateral bullying” and said that China would take “necessary countermeasures” to protect its interests..
The new trade tensions come at a time when the United States and China are trying to find ways to cooperate on other issues..
Biden and Xi are expected to hold a virtual summit next week, but it is unclear if the trade dispute will overshadow the talks..
“This is not a good sign for the Biden-Xi summit,” said Hirson. “It shows that the two sides are still far apart on trade, and it will be difficult to make progress on other issues if they can’t resolve this dispute.”.
