U.S. President Donald Trump threatened to hit China with tariffs on at least another $300 billion worth of goods, but said that he thought both China and Mexico wanted a resolution in their trade disputes with the United States.
While Trump said on Thursday that talks with China were ongoing, no face-to-face meetings have been held since May 10 when he sharply increased tariffs on Chinese goods worth $200bn to 25%, prompting Beijing to retaliate.
Tensions between the world's two largest economies have risen sharply since talks aimed at ending a festering trade war broke down in early May.
“Our talks with China, a lot of interesting things are happening. We'll see what happens... I could go up another at least $300 billion and I'll do that at the right time,” Mr. Trump said on his way to France for D-Day commemorations, without specifying which goods could be impacted.
“But I think China wants to make a deal and I think Mexico wants to make a deal badly,” he added.
“If the United States wilfully decides to escalate tensions, we'll fight to the end. China does not want to fight a trade war, but also is not afraid of one. If the United States wilfully decides to escalate trade tensions, we'll adopt necessary countermeasures and resolutely safeguard the interests of China and its people.” said Gao Feng, spokesman of China's Commerce Ministry in response to Mr. Trump’s threat.
The Commerce Ministry also issued a report on how the United States has benefited from years of economic and trade cooperation with China, asserting that the U.S. claims that China has taken advantage in bilateral trade were groundless. “Since the new U.S. administration took office, it has disregarded the mutually beneficial and win-win nature of China-U.S. economic and trade cooperation, and has advocated the theory that the United States has 'lost out' to China on trade. It has also taken the trade deficit issue as an excuse to provoke economic and trade frictions.” the ministry said in a research report.
In retaliation, China may target U.S. companies in the trade war. The ministry last week said that it was drafting a list of “unreliable entities” that have harmed Chinese firms' interests. Gao said the list did not target specific industries, companies or individuals, and details would be disclosed soon. Companies that abide by Chinese laws and market rules had nothing to worry about, he added.
The International Monetary Fund warned on Wednesday that escalating tariff threats were sapping business and market confidence and could slow global growth that is currently expected to improve next year. U.S. Treasury Secretary Steven Mnuchin is scheduled to meet People's Bank of China Governor Yi Gang this weekend at a gathering of G20 finance leaders in Japan, in the first face-to-face discussion between key negotiators in nearly a month.
Mexican and U.S. officials are also set to resume their talks in Washington on Thursday to avert an imposition of tariffs on Mexican goods.
After saying that 'not enough' progress was made to curb migration when the two sides met on Wednesday, Mr. Trump reiterated that 5% tariffs on all Mexico's exports to the United States due to start on June 10 would go ahead if progress was not made. The tariffs can rise to as much as 25% later in the year.
“They have to step up and they have to step up to the plate and perhaps they will,” said Mr. Trump.
