China Warns of Retaliation if US Takes More Trade Steps

04 August, 2018, 22:54 | Author: Sally Reid
  • Trump plans to impose 25 percent tariffs on $200B worth of Chinese goods

Trump had said he would implement the $200 billion round as punishment for China's retaliation against the initial tariffs aimed at forcing change in China's joint venture, technology transfer and other trade-related policies. The Trump administration has imposed tariffs on $50 billion of Chinese imports, has begun the tariff process for an additional $200 billion of Chinese goods and has threatened tariffs on even more-to the tune of some $500 billion in total.

In addition to the tariffs now in place, the Trump administration has proposed an additional 10 percent tariff on an additional $200 billion worth of imports from China.

The issue of China's response to USA threats of higher tariffs also came up during the daily news briefing by the Chinese Foreign Ministry.

"If we're going to use tariffs, this gives us more flexibility and it's a more meaningful threat", he said, adding that Trump's pressure strategy will not work if he does not resolve trade disputes with USA allies such as the European Union, Mexico and Canada.

"First, we advise the USA side to correct its attitude and not to try to engage in blackmail", China's foreign ministry spokesperson Geng Shuang said on Thursday.

"If the United States takes further measures that escalate the situation, China will definitely fight back", said Geng.

He said China has always believed that the disputes should be resolved through talks and communications, but the dialogue should be based on "equality and respect as well as established rules and credibility".

Deputy trade ministers from the European Union, Canada, Mexico, Japan and South Korea are concerned that Trump may impose tariffs on foreign imports of cars and auto parts if the U.S. Commerce Department finds that they pose a threat to national security.

Wednesday's tariff announcement is all the more significant because it follows an agreement between President Trump and European Commission chief Jean-Claude Juncker to negotiate a resolution of trade differences between the U.S. and EU.

The Chinese have already proposed buying more US goods in order to settle the dispute, only to have the White House-which wants to win a broader argument about intellectual property and subsidies-reject the proposal.

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Washington and Beijing are locked in battle over American accusations that China's export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how.

The WSJ also cites "industry officials who have discussed the move with the White House" and who said that another, perhaps far more important reason for the tariff increase "is to compensate for the decline in the value of the yuan by about 6% over the past two months".

Geng gave no indication whether the two sides were preparing to resume negotiations.

"Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods", Ennis said. "Nor did it make concerted efforts with China".

Trump recently threatened to slap punitive tariffs on all Chinese imports, which accounted for more than $500 billion past year. Beijing retaliated by imposing similar charges on the same amount of USA products.

- China's foreign minister said Thursday that US threats to hike tariffs run against the trend toward globalization and will hurt USA businesses and consumers.

Benchmark U.S. government bond yields edged lower on Thursday as investors sought safe-haven debt while the dollar.DXY rose against a basket of currencies.

What's the story on tariffs on China?

A U.S. Treasury spokesman didn't respond to a request for comment. Beijing has warned of an immediate mirror response. The U.S. threat and pressure will not work. But within days, Trump himself backed away from the deal, saying talks would "probably have to use a different structure".

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