China digs in, threatens U.S. with $60B in tariffs
BEIJING — The Chinese government threatened Friday to escalate its economic standoff with President Trump, vowing to impose tariffs on $60 billion in U.S. goods if the White House does not halt pending penalties on Chinese imports.
The Chinese Commerce Ministry said China could add duties of 5 percent, 10 percent, 20 percent or 25 percent on 5,207 types of U.S. imports. It also warned that it could adopt further countermeasures at any time.
Saying it was “forced to act,” Beijing cast the move as a response to Trump’s threat Wednesday to raise a proposed tariff rate on $200 billion worth of Chinese goods to 25 percent from 10 percent.
White House officials had hoped Trump’s latest threat would spook Chinese officials into negotiations, but Beijing instead appears to be digging in with more retaliatory measures that experts believe could hurt the economies of both countries.
The conflict between the White House and China shows no signs of abating. On Friday, Larry Kudlow, Trump’s top economic adviser, warned China against pushing Trump any further, saying its economy was not strong enough to withstand a lengthy fight.
“The Chinese had better not underestimate the determination of President Trump to follow through and seek zero tariffs and non-tariff barriers,” Kudlow said during an interview on Fox Business Network. The Chinese “are not in good economic shape.”
The U.S. economy is heavily reliant on importing more than $500 billion in goods each year from China. Democrats and Republicans have complained that China’s ability to sell goods in the United States at a lower cost than U.S. companies has put thousands of American firms out of business, costing manufacturing jobs and displacing the U.S. economy
But it has proved a difficult dynamic to change, given the American consumer’s reliance on Chinese goods.
Trump believes the gulf between how much China exports to the United States and how much the United States exports to China reflects an unfair trade imbalance, something that he has vowed to address through penalties on imports and a range of other measures.
But there are signs that his approach is not working the way he intended.
On Friday, the U.S. government reported that the gap between how much the United States imports from China and how much it exports reached a record level in the first six months of 2018.
Friday’s threat is the latest in a long list of actions and threats taken by both countries this year. Trump has imposed tariffs on Chinese steel and aluminum imports and another $34 billion in goods, mostly i ndustrial equipment. China responded with tariffs on $34 billion in U.S. goods, including a wide range of agricultural products. .
That led Trump to begin planning new tariffs on $200 billion in additional Chinese goods, triggering China’s new plan to penalize imports on $60 billion in U.S. goods.