China has said it would counter US protectionism "to the end, and at any cost", as a war of words over President Donald Trump’s proposed tariffs on Chinese imports escalated.
The statement from Beijing came after Trump ordered his administration to consider tariffs on an additional $100bn in Chinese goods on Thursday, sending US stock futures tumbling. The US president cited “China’s unfair retaliation” in response to his list of proposed tariffs earlier this week covering $50bn in Chinese products.
"The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said in a statement on its website on Friday. The ministry said it would hold a press briefing at 20:00 in Beijing Friday.
Trump’s unexpected move threatens to unravel efforts by top US and Chinese trade officials to lower the heat and reach an agreement that could stave off an escalating conflict. Administration officials have spent the past two days trying to tamp down fears of a trade war, with chief economic adviser Larry Kudlow saying Thursday the US could still hammer out a deal with Beijing.
European shares, US futures and commodities all fell after Trump’s latest threat, while treasuries climbed.
“By fueling uncertainty among market participants, fears of a ‘trade war’ have added to the volatility already witnessed earlier this year in equity markets,” Benoit Coeure, a member of the European Central Bank’s executive board, said in Cernobbio, Italy. “None of this supports growth and employment.”
Trump said US Trade Representative Robert Lighthizer would identify which new products may be subject to tariffs. He later stressed that any additional tariffs first would be subject to a 60-day public comment period.
“No tariffs will go into effect until the respective process is complete,” Lighthizer said in a statement. The administration hasn’t said when any of the proposed tariffs would go into force.
China said Wednesday it would levy a 25% tariff on about $50bn of US imports including soybeans, automobiles, chemicals and aircraft. That was in response to Trump’s proposed tariffs targeting industries including aerospace, robotics and machinery.
Were China to want to match Trump’s latest threat, it wouldn’t have enough American goods imports to target. It could take other measures like curbing package tours or student transfers to the US, or hamper American companies operating in China.
“This is starting to feel like the beginnings of a trade war, if simply each proposal is matched with a retaliation,” said Patrick Bennett, a Hong Kong-based strategist at Canadian Imperial Bank of Commerce. “The US risks isolating itself from global trade in this process and we think the US, USD and US asset markets have more to lose.”
Trump struck a defiant tone during a speech in West Virginia on Thursday, saying it was time to stop China from “taking advantage” of America.
“You have to go after the people who aren’t treating you right,” Trump said. “We’re going to have a fantastic relationship long term with China, but we have to get this straightened out. We have to have some balance.”
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