Published: Sat, August 04, 2018
Global Media | By Garry Long

China says United States tariff threat runs against trend of the times

China says United States tariff threat runs against trend of the times

Chinese Foreign Ministry spokesman Geng Shuang said Beijing was ready for "dialogue and consultation" on the issue, but added that "if the United States takes further measures that escalate the situation, China will definitely fight back".

Geng said at a news conference, "we advise the United States to be level-headed and avoid simply acting on impulse".

In June, Trump directed the Office of the US Trade Representative (USTR) to impose an additional 10% tariff on US$200bn of Chinese goods, in response to China's decision to impose retaliatory duties on US goods.

The US-EU trade talks were more significant from the political point of view, as they eased the fears over a full-scale transatlantic trade war before the US midterm elections, but not so important from the economic perspective. For example, the 25 percent tariffs that the United States had threatened to impose on European Union cars and auto parts would have resulted in job losses leading to social problems in countries such as Germany. It wants China to stop stealing USA corporate secrets, abandon plans to boost its high-tech industries at America's expense and stop subsidizing Chinese companies with cheap loans that enable them to compete unfairly.

Mr Wang was firm that any pressure which the USA was trying to put on China would not work.

U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday.

"If we're going to use tariffs, this gives us more flexibility and it's a more meaningful threat", he said.

- United States dollars rises as White House ups ante in US-China trade spat.

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Lighthizer noted that if tariffs are increased to 25 percent, they would be applied to the proposed list of products that were announced on July 10.

Trump and senior administration officials believe the volume of USA imports and vigorous health of the American economy give Washington an advantage in the current confrontation. Democrats and Republicans have complained that China's ability to sell goods in the United States at a lower cost than USA companies has put thousands of American firms out of business, costing manufacturing jobs and hurting the US economy.

"We said before that this round of tariffs amounted to doubling down on the recklessness of imposing trade policy that will hurt USA families and workers more than they will hurt China", said Matthew Shay, president of the National Retail Federation. "The big picture of a trade war and protectionism is that it is a slow death - a death by a thousand paper cuts instead of anything sudden and shocking", said Richard Kelly, head of global strategy at TD Securities.

Trump has accused China of stealing USA intellectual property, manipulating its own currency and taking other steps that give its firms an unfair competitive advantage over US companies.

Thus, keeping an eye on China's imports of major commodities in coming months will be key to working out just how quickly the trade dispute is filtering through to the real economy, and determining if the phoney trade war has become a real one.

Retaliatory tariffs were necessary, China says, to "defend the dignity of the country and interests of its people" as well as "the mutual interest of all the countries in the world".

White House officials had hoped Trump's latest threat would frighten Chinese officials into negotiations, where Trump aims to secure more favorable terms for USA manufacturers in one of the world's largest marketplaces.

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