China vows to retaliate after Trump’s $200bn tariff hit
Washington, US - China vowed to retaliate after the US said it will impose a ten per cent tariff on about US$200bn in Chinese goods next week and more than double the rate in 2019.
The statement from the Ministry of Commerce didn’t note specific actions, though China has previously said it would respond with levies on US$60bn worth of US goods. Such a move risks deepening the standoff even further, with President Donald Trump saying in a statement on Monday the US will immediately pursue additional tariffs on about US$267bn of Chinese imports if Beijing hits back.
‘The US side insisted on imposing tariffs, which has brought new uncertainty to the bilateral negotiations’, the Commerce Ministry statement said. ‘ We hope that the US side will recognise the negative consequences of such acts and take convincing measures to correct them in a timely manner’.
Global markets reacted to the latest trade war escalation with relative calm. Chinese stocks gained amid expectations the government will take steps to offset the negative effect of tariffs.
On a panel at meetings of the World Economic Forum, Fang Xinghai, vice chairman of China’s Securities Regulatory Commission, said China won’t be pressured by Trump’s trade tactics and talked up the economy’s strength. While he estimated a negative hit to China’s GDP growth of about 0.7 percentage points if the US goes ahead with tariffs on all China exports to the US, Xinghai also said he’s confident that relations between both countries can normalise and said he hopes both sides can negoti- ate on an equal basis.
“It is good for the US economy to have good relations with China and good for the rest of the world,” he said. “President Trump, as shown in the North Korean affair, is able to revert himself very quickly. I think we have to take that into account.”
Announcing its tariffs, the US administration said it is giving American businesses a chance to adjust and look for alternative supply chains by delaying an increase to 25 per cent on January 1 for the US$200bn batch of Chinese goods, according to two senior administration officials who briefed reporters on Monday. The ten per cent tariff will take effect on September 24.
“For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies,” Trump said. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.”
Smart watches and Bluetooth devices were removed from the tariff list, along with bicycle helmets, high chairs, children’s car seats, playpens and certain industrial chemicals. They were among 300 tariff lines scrubbed from the preliminary list released in July, according to one of the officials. No items were added, the officials said.
“We were trying to do things that were least intrusive on the consumer,” US Commerce Secretary Wilbur Ross said on Tuesday on CNBC.