China Fires Back in Trade War

China Fires Back in Trade War

China’s new countermeasures to impose additional tariffs on about 60 billion U.S. dollars worth of products from the United States are “rational and restrained,” a spokesperson with the Ministry of Commerce (MOC) said Friday.

The Customs Tariff Commission of the State Council on Friday unveiled lists of 5,207 items of U.S. products to be subject to additional tariffs of four different rates — 25 percent, 20 percent, 10 percent, and 5 percent.

The decision was made in response to a U.S. plan to raise tariffs to be imposed on 200 billion dollars of Chinese goods from 10 percent to 25 percent.

“China’s countermeasures with differentiated tariff rates are rational and restrained, and were proposed after extensively soliciting opinions and careful evaluation,” the spokesperson said in a statement.

The measures have taken into full consideration factors including the people’s well-being, the bearing capacity of companies, and maintaining the functioning of the global industrial chain, according to the spokesperson.

“China always believes that consultation based on the principles of mutual respect, equality, and mutual benefit is the effective way of resolving trade differences, and any unilateral threat or blackmail will only aggravate contradictions and hurt the interests of all sides,” the spokesperson said.

The spokesperson pointed out that, because the United States had repeatedly escalated the situation in disregard of the interests of enterprises and consumers of both countries, China was forced to take the countermeasures to protect national dignity and its people’s interests, defend free trade and multilateral mechanisms, and safeguard the common interests of all countries in the world.

Commenting on the latest U.S. move to add some Chinese companies into its list of entities subject to U.S. export controls, the MOC said that China stands firmly against U.S. unilateral sanctions on Chinese entities.

China urges the United States to relax its controls over exports to China, and protect and promote the high-tech trade and cooperation between companies from both countries, the ministry said.

China on Friday announced its decision to impose additional tariffs of four different rates on 5,207 items of imported U.S. products worth 60 billion U.S. dollars.

The rates of additional tariffs on such products will be 25 percent, 20 percent, 10 percent, and 5 percent, according to the Customs Tariff Commission of the State Council.

“China was forced to take the countermeasures” in response to a U.S. plan to raise tariffs to be imposed on 200 billion dollars of Chinese goods from 10 percent to 25 percent, the commission said in a statement.

“If the United States act willfully and puts its additional tariff measures into effect, China will instantly implement such tariff measures,” the commission said.

“The United States violated consensuses reached by multiple bilateral negotiations and once again unilaterally escalated trade frictions,” the commission said, noting that the move severely violated World Trade Organization rules, hurt the global industrial chain and free trade mechanism, substantially damaged the interests of China and the Chinese people, and will also have negative impacts on the economic development of the world including the United States.

China has taken the countermeasures to safeguard its own legitimate rights and interests and to curb the escalation of trade frictions. Meanwhile, the measures are expected to lower the impact on the domestic production and people’s lives as much as possible, it said.

After implementing the countermeasures, authorities will evaluate the effects together with all sectors of society and strive to minimize the influence on production and lives, the statement said.

“China promises that it will continue to unswervingly push forward reform and opening-up based on established arrangements and pace, firmly support economic globalization, firmly safeguard free trade rules and multilateral trade mechanisms to realize joint development and share prosperity with all countries that pursue progress,” the commission said.

Full lists of U.S. products subject to different levels of additional tariffs are available on the website of the Ministry of Finance.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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