Economy

China promises to strike back against latest US trade war move

Beijing says it cannot accept latest US tariffs on further $200bn of imports from China

The US president Donal Trump kicked off the process of imposing tariffs on a further $200 billion of imports from China, in a significant escalation of the trade war between the two powers.

Sam Fleming Washington
Wed Jul 11 2018 - 21:10

China accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in its trade dispute, threatening 10 per cent tariffs on $200 billion of Chinese goods.

China’s commerce ministry said on Wednesday it was “shocked” and would complain to the World Trade Organisation, but did not immediately say how it would retaliate. In a statement, it called the US actions “completely unacceptable”.

The foreign ministry described Washington’s threats as “typical bullying” and said China needed to counter-attack to protect its interests. “This is a fight between unilateralism and multilateralism, protectionism and free trade, might and rules,” foreign ministry spokeswoman Hua Chunying told a regular briefing on Wednesday.

Beijing has said it would hit back against Washington's escalating tariff measures, including through "qualitative measures," a threat that US businesses in China fear could mean anything from stepped-up inspections to delays in investment approvals and even consumer boycotts.

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The Wall Street Journal, citing unnamed Chinese officials, said Beijing was considering steps including holding up licences for US companies, delaying approvals of mergers involving US firms and stepping up border inspections of American goods.

Tourism

China could also limit visits to the US by Chinese tourists, a business state media said is worth $115 billion, or shed some of its US treasury holdings, Iris Pang, Greater China economist at ING in Hong Kong, wrote in a note.

The $200 billion far exceeds the total value of goods China imports from the US, which means Beijing may need to think of creative ways to respond to such US measures.

On Tuesday, US officials issued a list of thousands of Chinese imports the Trump administration wants to hit with the new tariffs.

"For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market and engage in true market competition," US trade representative Robert Lighthizer said in announcing the proposed tariffs. "Rather than address our legitimate concerns, China has begun to retaliate against US products . . . There is no justification for such action."

Last week, Washington imposed 25 per cent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China. Each side is planning tariffs on a further $16 billion in goods that would bring the totals to $50 billion.

Investors fear an escalating Sino-US trade war could hit global growth and damage sentiment. – Reuters

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