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China vows to take countermeasures as Trump escalates trade war again

Bloomberg August 2 | Updated on August 02, 2019 Published on August 02, 2019

The new import taxes, which Trump later said could go well beyond 25 per cent, will be imposed beginning September 1   -  OrnRin

Beginning Sept 1, US plans to impose 10% tariffs on $300 billion in Chinese goods

Beijing pledged to respond if the US insists on adding extra tariffs to the remainder of Chinese imports, after President Donald Trump’s abrupt escalation of the trade war.

Trump on Thursday announced that he would impose a 10 per cent tariff on a further $300 billion in Chinese imports, a move set to hit American consumers more directly than any other in his trade wars so far. The new import taxes, which Trump later said could go well beyond 25 per cent, will be imposed beginning September 1 on a long list of goods expected to include smartphones, laptop computers and children’s clothing.

“If the US is going to implement the additional tariffs, China will have to take necessary countermeasures,” Foreign Ministry spokeswoman Hua Chunying said at a regular briefing in Beijing on Friday. She didn’t elaborate on what the measures would be.

“China won’t accept any maximum pressure, threat, or blackmailing, and won’t compromise at all on major principle matters,” Hua said.

 

The threat to tax practically all US imports from China marks the biggest escalation so far taken by the Trump administration and brings a surprise end to a truce that had only been in place since the President met Xi Jinping, his Chinese counterpart, in Osaka at the end of June. China’s Foreign Minister Wang Yi made the first official response to Trump’s escalation earlier Friday.

‘Not the right solution’

“Imposing new tariffs is absolutely not the right solution to trade frictions,” he told a local Chinese television station while attending an Asean meeting in Bangkok.

Analysts see China now as being less likely to try to match Trump’s tariffs dollar-for-dollar, but instead hunker down.

“For the Chinese, Trump is losing his last bit of credibility here, and whether the talks can be held in September as scheduled has been put into question,” said Zhou Xiaoming, a former Commerce Ministry official and diplomat.

In a tweet, Trump said China had not lived up to a promise Xi made in Osaka to buy US agricultural goods and to halt illegal exports of fentanyl. He later told reporters that he’s not concerned at all about the negative reaction from markets.

“I think they want to try and make a deal with us, but I’m not sure,” Trump said in a Thursday evening rally in Cincinnati. “Until such time that there is a deal, we will be taxing the hell out of China.”

Trump said there were no plans to reverse a decision made in Osaka to allow more sales by US suppliers of non-sensitive products to blacklisted Chinese telecoms giant Huawei Technologies Co. Trump in a series of tweets announcing the new tariffs left the door open to further talks.

“We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!” he said.

The US Trade Representatives Office said it will release the final, official list of products to receive the higher taxes in the coming days. Analysts said the decision to walk away from the Osaka truce indicated a level of desperation by an administration whose efforts to force China to commit to economic reforms were going nowhere.

Published on August 02, 2019
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