Beijing bellows back at Trump tariff threats
WASHINGTON — President Donald Trump’s latest threat to ratchet up tariffs on Chinese imports was met with a forceful response from Beijing on Friday as escalating trade tensions between the two largest economies once again unnerved financial markets and increased concerns about the prospect of a full-blown trade war.
After Trump ordered his administration to consider slapping taxes on an additional $100 billion in Chinese goods on top of $50 billion in goods previously announced, China’s Commerce Ministry vowed to fight the new tariffs “at any cost” with a full slate of countermeasures.
In Beijing, a Commerce Ministry spokesman said China doesn’t want a trade war — but isn’t afraid to fight one.
“If the U.S. side announces the list of products for $100 billion in tariffs, the Chinese side has fully prepared and will without hesitation counterattack with great strength,” spokesman Gao Feng said.
Chinese officials did not provide specifics, but Beijing could take a host of actions to make life difficult for American businesses operating in China, in addition to levying tariffs on more U.S. imports to China.
With U.S. administration officials sounding conciliatory one day and hostile the next and the president prone to firing another of his tweets, investors simply don’t know what the U.S. wants to achieve in its talks with China, said Katie Nixon, chief investment officer for Northern Trust Wealth Management.
“The process itself seems to be quite chaotic,” she said. “We’re not quite sure what the long-term strategy is.”
Stocks ended the week the way they began it: tumbling as investors worry that Ministry of Commerce spokesman Gao Feng said China will counter additional tariffs with its own levies on U.S. goods. tariffs and harsh words between the countries will touch off a trade war that derails the global economy.
The Dow Jones industrial average dropped 572.46 points, or 2.3 percent, to 23,932.76. It’s down 10 percent from its record high in late January.
The S&P 500, which many index funds track, lost 58.37 points, or 2.2 percent, to 2,604.47. The Nasdaq composite slid 161.44 points, or 2.3 percent, to 6,915.11. The Russell 2000 index of smaller-company stocks dipped 29.63 points, or 1.9 percent, to 1,513.30.
Jason Pride, chief investment officer for Glenmede’s private client business, said Trump’s latest order caught investors off guard.
“It shows a willingness to go to the mat on this and fight it out,” he said. Still, Pride said, all of the proposed tariffs add up to a pretty small fraction of trade between the U.S. and China, and overall, they wouldn’t affect the nation’s economy that much if they do go into effect.
Earlier this week, China quickly responded to the Trump administration’s tally of $50 billion in Chinese products that would face 25 percent tariffs with its own list of Americanmade goods, including cars, aircraft and soybeans, that would be subject to import taxes of a similar amount.
Trump, apparently angered by Beijing’s tit-for-tat response, upped the ante Thursday evening, saying that instead of correcting its practice of unfairly appropriating American intellectual property, “China has chosen to harm our farmers and manufacturers.”
“China’s illicit trade practices — ignored for years by Washington — have de- stroyed t housands of American factories and millions of American jobs,” Trump said in a statement.
Trump, however, kept open the possibility of negotiations. And U.S. Trade Representative Robert Lighthizer, while saying the president’s proposal is “an appropriate response,” made clear that any additional tariffs, like the earlier ones announced, would not take effect immediately.
Even so, the intensifying rhetoric and threats from both sides have shaken stock markets in recent days and left many wondering how much worse things will get.
“Hopefully the president is just blowing off steam again, but if he’s even halfserious, this is nuts,” said Sen. Ben Sasse, R-Neb. “He’s threatening to light American agriculture on fire.”