BEIJING -- China announced on Friday a $3 billion list of U.S. goods for possible retaliation in a tariff dispute with President Donald Trump and girded for a bigger battle over technology policy as financial markets sank on fears of global disruption.
The Commerce Ministry said higher duties on pork, apples, steel pipe and other goods would offset Chinese losses caused by Trump's tariff increases on steel and aluminum imports. It urged Washington to negotiate a settlement but set no deadline.
Trump said Friday that he was not concerned that the tariffs would be a drag on the stock market. He added: "China is going to end up treating us fairly."
In a separate and potentially bigger dispute, the ministry criticized Trump's decision Thursday to approve a possible tariff increase on Chinese imports worth up to $60 billion over Beijing's technology policy. It gave no indication of a possible response, but a Foreign Ministry spokesman said Beijing was "fully prepared to defend" its interests.
"We don't want a trade war, but we are not afraid of it," said the spokesman, Hua Chunying.
U.S. stock markets ended their worst week in more than two years on Friday after China's response to the tariffs. The Dow Jones industrial average plummeted in the last hours of a bouncy day Friday and closed down 424.69 points.
The threat of a tit-for-tat tariff fight dragged down European and Asian financial markets with indexes in Tokyo, Shanghai and Seoul taking heavy losses.
Tokyo's benchmark tumbled by an unusually large 5.1 percent while the Shanghai composite index closed down 3.4 percent.
The dollar dipped to 104.90 yen as investors shifted into the Japanese currency, which is viewed as a "safe haven" from risk.
China's response Friday appeared to be aimed at increasing domestic U.S. pressure on Trump by making clear which exporters, including farm areas that voted for him in 2016, might be hurt.
"Beijing is extending an olive branch and urging the U.S. to resolve trade disputes through dialogue rather than tariffs," said economist Vishnu Varathan of Mizuho Bank in a report. "Nevertheless, the first volley of shots and retaliatory response has been set off."
On March 8, the day Trump ordered the tariffs on steel and aluminum imports, the University of Arkansas System's Agriculture Division predicted that a 25 percent retaliatory tariff on U.S. soybeans, rice, corn and grain sorghum could cost the state's economy $383 million.
The list announced Friday was linked to Trump's steel and aluminum tariffs, but companies already were looking ahead to a battle over complaints Beijing steals or forces companies to hand over technology.
The tensions reflect the dueling nationalistic ambitions of Trump and his Chinese counterpart, Xi Jinping.
U.S. efforts to increase exports of technology-based goods, begun under Trump's predecessor, Barack Obama, conflict with China's plan for state-led development of global competitors in fields from robotics to electric cars. Foreign business groups complain that Chinese regulators are trying to squeeze them out of promising industries.
The Commerce Ministry announcement Friday made no mention of jetliners, soybeans or other products that are the biggest U.S. exports to China by value. That leaves Beijing room to take more drastic steps.
Chinese officials are trying to figure out how to address U.S. concerns, said Jake Parker, vice president for China operations of the U.S.-China Business Council, which represents American companies that do business with China.
"Until the Trump administration articulates those concerns and how China can address them, it's going to be very, very difficult for China to make those changes," said Parker.
The official cited Beijing's "Made in China 2025" plan as "hugely problematic." It calls for creating Chinese competitors in electric cars, robots, artificial intelligence and other fields. Business groups complain it will hamper or outright block foreign access to those industries.
The latest proposed Chinese tariffs would add a 25 percent charge on pork and aluminum scrap, mirroring Trump's 25 percent duty on steel, according to the Commerce Ministry. A second list of goods, including wine, apples, ethanol and stainless-steel pipe, would be charged 15 percent.
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Chinese purchases of those goods last year totaled $3 billion, the ministry said.
China's announcement of proposed tariffs on imported U.S. pork has so far hit only one producer very hard -- a Chinese company.
Shares of U.S. pork suppliers Tyson Foods Inc. and Hormel Foods Corp. were little changed Friday after China announced the proposed tariffs, but WH Group Ltd. plunged. Hong Kong-based WH is suffering the most because its U.S. arm, Smithfield, is the world's largest pork producer. WH acquired the company for $4.73 billion in 2013.
Soybean futures for May delivery fell as much as 2 percent to $10.0925 a bushel on the Chicago Board of Trade, the lowest for the contract since Feb. 12. The price settled down 0.1 percent at $10.2825 as soybean meal jumped the most in five weeks amid severe drought in Argentina, the world's top exporter of the livestock feed.
Hog futures for June settlement fell 1.8 percent to 74.15 cents a pound on the Chicago Mercantile Exchange. Earlier, the price touched a record 73.225 cents. This week, the price plunged 6.3 percent, the most ever.
Ethanol futures for April delivery fell 2 percent to $1.451 a gallon, the lowest since Feb. 13, because of a potential Chinese tariff.
From hog producers in Iowa to apple growers in Washington state and winemakers in California, farmers expressed deep disappointment Friday over being put in the middle of a potential trade war with China by the president many of them helped elect.
American farmers "should be not necessarily infuriated but close to it," said Wayne Humphreys, who farms corn and soybeans and raises hogs and cattle near Columbus Junction, Iowa. "We've invested a lot of time, talent and treasure in developing markets around the world, and with the stroke of a pen, that investment has been jeopardized."
Overall, the nation's farmers shipped nearly $20 billion of goods to China in 2017. The American pork industry sent $1.1 billion in products, making China the No. 3 market for U.S. pork.
U.S. apple growers just got their foot in the door in China in 2015, and the country is now their 10th-largest market, with demand growing. They expressed frustration that their efforts could be damaged with tariffs.
"We are competing, and winning, with our exports to China growing nicely from zero to about 2.5 million boxes per year," said Jim Bair, CEO of the U.S. Apple Association, a trade group. He warned that U.S. apple growers are going to "get hurt in a fight we didn't start and in which we have no interest."
At a time when U.S. wine exports have been slipping overall, there's been growth in exports to China, where a rapidly growing middle class is adopting many Western tastes.
"Chinese retaliation against U.S. wine would put our producers at a significant disadvantage in one of the most important markets in the world at a critical time," said Bobby Koch, CEO of the Wine Institute.
The U.S. steel and aluminum tariffs also have irked Japan, America's closest ally in Asia.
"We have repeatedly told the U.S. side that steel and aluminum imports from its ally Japan will not adversely affect America's national security, and that Japan should be excluded," said Chief Cabinet Secretary Yoshihide Suga.
The United States buys little Chinese steel or aluminum, but analysts have said Beijing would feel obligated to take action to avoid looking weak.
Beijing reported a trade surplus of $275.8 billion with the United States last year, or two-thirds of its global total. Washington reports different figures that put the gap at a record $375.2 billion.
Information for this article was contributed by Gillian Wong, Yu Bing, Mari Yamaguchi of The Associated Press; by Frank Lockwood of the Arkansas Democrat-Gazette; by Thomas Heath of The Washington Post; and by Jeff Wilson and Simon Casey of Bloomberg News.
Business on 03/24/2018