China Raises Tariffs on U.S. Pork, Fruit in Trade Dispute

Courtesy: MGN
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China announced a tariff hike on $50 billion of U.S. goods Wednesday, including soybeans, aircraft, autos. The move came shortly after Beijing vowed to impose measures of the "same strength" in response to a proposed U.S. tariff hike on $50 billion worth of Chinese goods.

China's Commerce Ministry on Wednesday criticized the U.S. move as a violation of global trade rules and said China was acting to protect its "legitimate rights and interests." It said a 25% tariff would be imposed, but as CBS News correspondent Ben Tracy reports, the date the charges will take effect has yet to be announced.

"I don't want to see a trade war," Branstad told Tracy. "I want to see us work together to resolve these problems."

Ask directly whether he thought a trade war with Beijing would be good for the United States, Branstad replied: "No. I think it would be better to work these things out."

The clash reflects growing tension between President Donald Trump's promises to narrow the multibillion-dollar U.S. trade deficit with China and the ruling Communist Party's development plans. Those include using access to China's vast market as leverage to induce foreign automakers and other companies to help create or improve industry and technology.

Meanwhile, analysts at Sanford C. Bernstein are saying that BMW, Mercedes-Benz and Tesla are the biggest potential losers from higher Chinese tariffs on U.S. auto imports.

Bernstein said in a note Wednesday that BMW sends 89,000 vehicles annually from the U.S. to China while Daimler AG's Mercedes-Benz ships 65,000. Tesla sells about 14,000 but China accounts for around 15% of forecast Model S and X sales this year.

If enforced, the measures announced by Beijing earlier would increase tariffs on cars from the United States to 50% from the usual 25%.

BMW is headquartered in Munich, Germany but claims the title of biggest U.S. car exporter by shipping vehicles including its X5 SUV from its Spartanburg, South Carolina plant. Stuttgart-based Daimler builds Mercedes in Vance, Alabama.

The Bernstein team raised the question of whether the threat of a U.S-China trade war could "nudge the Germans toward localization" - that is, moving production to China.

(CBS News, The Associated Press contributed to this report.)