China vows retaliation for latest $200bn United States tariff threat

Remigio Civitarese
Luglio 12, 2018

In Beijing, Li Chenggang, assistant minister at China's Commerce Ministry, said that the latest USA proposals would hurt both countries and pointed to declines in Chinese export growth and overseas investment to the United States in the first half of this year. This has raised concerns that China could retaliate with non-tariff trade measures. Adding $200 billion in goods to the list of existing tariffs would bring the total value of tariffed goods to $450 billion-just shy of the $505 billion in exports that China sends to the U.S. Trump had threatened this level of escalation as early as last week, before the current tariffs even went into effect.

"The Chinese government as always will have no choice but to take the necessary countermeasures", said China's ministry of commerce in a statement, without elaborating further.

President Donald Trump has threatened to tax as much as $US550 billion in Chinese products - an amount that exceeds America's total imports from China previous year.

The previous round of tariffs: The Trump administration last week imposed 25 percent tariffs on $34 million in Chinese goods, prompting Beijing to impose retaliatory tariffs of the same amount on USA imports.

The Chinese commerce ministry has slammed the United States plan to impose tariffs on additional imports worth some $200 billion as totally unacceptable, promising a mirror response to defend its national interests.

He said: "Chinese equities were amongst the worst performers today, with the Shanghai Composite dropping 1.8% after the US Trade Representative set out the $200bn of Chinese imports on which it intends to impose a 10% tariff". "As an industry that touches 96 percent of all manufactured goods and which has much to gain from a productive, respectful trading relationship with China, ACC and our members remain hopeful that the USA and China can resolve their differences and prevent further harm to US manufacturers, farmers, and consumers".

US Trade Representative Robert Lighthizer said China's retaliatory tariffs were "without any global legal basis or justification".

On Wednesday, China's main stock index lost 1.8 per cent and Japan's market benchmark fell 1.1 percent.

Some U.S. business groups and lawmakers from Trump's own Republican Party were critical of the escalating tariffs.

The tariffs will not be imposed until after a two-month period of public comment on the proposed list, but some U.S. business groups and senior lawmakers were quick to criticize the move.

"Tonight's announcement appears reckless and is not a targeted approach", said Senate Finance Chairman Orrin Hatch in a statement.

The National Association of Manufacturers also criticized the USA decision, saying this latest round of tariffs could undermine the economic gains from the administration's tax and regulatory reform policies.

"Unfortunately, China has not changed its behaviour - behaviour that puts the future of the United States economy at risk".

'Tariffs on $200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families, ' trade lawyer Scott Lincicome said. "Tariffs threaten to boomerang on the very workers they're supposed to help, and will only further undermine the confidence manufacturers need to make investments in new equipment, facilities and people".

The officials said they tried to target goods that would reduce the harm to USA consumers.

As its dispute with Washington deepened, Beijing has been calling on other countries to support global free trade and has talked up efforts to ease investment rules.

Trump has said continuously that China has taken advantage of the United States economy, and he has vowed to hit almost all the country's products with tariffs, as much as $450bn.

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