China threatens to retaliate against Trump tariffs

High-stakes:  People checking products at a discount store in Beijing on Friday.

High-stakes: People checking products at a discount store in Beijing on Friday.

China on Friday said it would not be blackmailed and warned of retaliation after U.S. President Donald Trump vowed to slap a 10% tariff on $300 billion of Chinese imports from next month , sharply escalating a trade row between the world’s biggest economies.

Mr. Trump stunned financial markets on Thursday by saying he plans to levy the additional duties from September 1, marking an abrupt end to a truce in a year-long trade war that has slowed global growth and disrupted supply chains.

Beijing would not give an inch under pressure from Washington, Chinese Foreign Ministry spokeswoman Hua Chunying said.

“If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests,” Ms. Hua told a news briefing in Beijing.

“We won’t accept any maximum pressure, intimidation or blackmail. On the major issues of principle, we won’t give an inch,” she said, adding that China hoped the U.S. would “give up its illusions” and return to negotiations based on mutual respect and equality.

Mr. Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal.

The newly threatened duties, which Mr. Trump announced in a series of tweets after his top trade negotiators briefed him on a lack of progress in talks in Shanghai this week, would extend tariffs to nearly all Chinese goods that the U.S. imports.

The President later said if trade discussions failed to progress he could raise tariffs further — even beyond the 25% levy he has already imposed on $250 billion of imports from China.

Senior Chinese diplomat Wang Yi told reporters on the sidelines of an Association of Southeast Nations event in Thailand that additional tariffs were “definitely not a constructive way to resolve economic and trade frictions”.

Bad behaviour

U.S. Secretary of State Mike Pompeo, who was also in Bangkok, decried “decades of bad behaviour” by China on trade and said Mr. Trump had the determination to fix it.

One Chinese official told Reuters it was not the first time Mr. Trump had “flip-flopped”, and that though the time between the talks being declared constructive and Mr. Trump’s threat of new tariffs was short, officials in Beijing were already prepared. “Discussion followed by a fight has become the normal pattern,” the official said.

Possible retaliatory measures by China could include tariffs, a ban on the export of rare earths that are used in everything from military equipment to consumer electronics, and penalties against U.S. companies in China, analysts say.

So far, Beijing has refrained from slapping tariffs on U.S. crude oil and big aircraft, after cumulatively imposing additional retaliatory tariffs of up to 25% on about $110 billion of U.S. goods since the trade war broke out last year.

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Printable version | Sep 28, 2022 9:42:33 am |