China, US have first trade row after eye-popping US$253 billion deals

Beijing hit back at Washington over its decision to impose anti-dumping duties on Chinese plywood products, as a high-profile trade row intensified just days after US President Donald Trump and President Xi Jinping oversaw the signing of US$253 billion in trade deals.

The dispute over plywood panels used widely in furniture and interior decoration took place before Trump concluded his Asia trip. The tensions suggested that trade relations between the world’s two major economies will remain bumpy, despite Beijing’s efforts to gloss over the differences during Trump’s maiden presidential visit in China last week by agreeing to the package of deals.

The US Commerce Department said on Monday that it found China was providing subsidies of up to 195 per cent of product value and would impose tariffs at corresponding rates. In response, China’s Ministry of Commerce said in a brief statement on Tuesday that the US method of calculating Chinese cost discriminated against China and violated World Trade Organisation rules. China said it felt deep “dissatisfaction” over the case.

While the value of Chinese exports of plywood was merely US$1.1 billion last year, or about 0.25 per cent of total Chinese cargo shipments to the US, the dispute touched on a thorny issue in the countries’ relations: China asked the US to treat it as a market economy but the US refused to do so.

Trump avoided directly criticising China over trade during his 12-day Asian trip. While he said he did not “blame China” for the US’ trade deficit, he demanded fair trade from Asian countries.