China threatens to up import tariffs

Beijing continues to dig in with more retaliatory measures

BEIJING — The Chinese government threatened Friday to dramatically escalate its economic standoff with President Donald Trump, vowing to impose tariffs on $60 billion in U.S. goods if the White House does not halt pending penalties on Chinese imports.

In a statement, 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 counter measures at any time.

Saying it was “forced to act,” Beijing cast the move as a response to Mr. Trump’s threat on 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 Mr. 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 rapidly developing conflict between the White House and China shows no signs of abating. On Friday, Larry Kudlow, Mr. Trump’s top economic adviser, warned China against pushing Mr. 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 nontariff barriers,” Mr. 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.

Mr. Trump believes the big 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 new threat from Beijing came just after Secretary of State Mike Pompeo met with Chinese Foreign Minister Wang Yi in Singapore. But White House officials said formal talks between the countries have mostly lapsed as the economic restrictions have hardened.