China to Step Up Trade War

China to Step Up Trade War

China to Step Up Trade War

Beijing warned Friday it was prepared to impose new tariffs on $60 billion worth of US goods if Washington ups the ante in the escalating US-China trade war.

The commerce ministry issued a statement saying the new duties would be applied if Washington pulled the trigger on President Donald Trump’s threat to raise tariffs on $200 billion worth of Chinese goods.

The statement said China reserves the right to apply “other countermeasures”.

“China always believes that consultation on the basis of mutual respect, equality and mutual benefit is an effective way to resolve trade differences,” the ministry said.

“Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties.”

The threat came a day after Chinese officials appealed for dialogue based on “mutual respect”, with Foreign Minister Wang Yi urging the United States to remain “cool-headed”.

US officials said Wednesday that Trump had asked the US Trade Representative to consider increasing the proposed tariffs on $200 billion worth of Chinese goods to 25 percent from the planned 10 percent.

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.

Trump has threatened to slap tariffs on virtually all of China’s exports to the United States in the tit-for-tat trade conflict.

The announcement comes after US President Donald Trump threatened to raise the proposed tariffs on $200 billion of Chinese exports from 10 percent to 25 percent. The step is reportedly being considered by the White House in order to narrow the trade deficit between the US and China.

In July, Washington fired the first salvo in the escalating trade war with Beijing by introducing 25 percent tariffs on Chinese imports worth $34 billion. China immediately retaliated by imposing levies on the same amount of US goods. The next round of tariffs on mutual imports worth $16 billion could come into force on Friday.

The trade dispute between Beijing and Washington comes amid the growing discontent frequently expressed by President Trump over the US trade deficit with China, which reached $320 billion last year. Trump also accused China of unfair trade practices, intellectual property theft, currency manipulation and providing state aid to Chinese firms.

Commenting on US threats, Chinese Foreign Ministry spokesman Geng Shuang told journalists on Friday that “the Chinese side calls on the US to return to rationality, and eradicate its mistakes to create the right conditions for resolving the problem.”

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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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