China will take countermeasures if the United States imposes tariffs on US$200 billion worth of Chinese products, Beijing said on Thursday, repeating its tough stance in the trade war despite the growing impact it is having on its own economy.
“If the US takes new trade measures against China … China will take necessary countermeasures,” commerce ministry spokesman Gao Feng told a regular press conference.
“Any measures pressuring China [to yield] will be ineffective, as the trade war can’t solve any problems.”
Gao’s comments came in response to the possibility of the US imposing tariffs on an additional US$200 billion worth of goods it imports from China as early as this week. US President Donald Trump said last week that he wanted to take action as soon as the public comment period on the proposed sanctions concluded. That deadline passed on Thursday.
If Washington does levy the new 25 per cent tariffs – on goods ranging from selfie sticks to semiconductors – it would mark a significant escalation in the trade war between the world’s two biggest economies.
China and the US levied initial 25 per cent tariffs on US$34 billion worth of each other’s products on July 6, and those were extended to a further US$16 billion of goods at the end of last month.
While China cannot exactly match Washington’s threat to raise the stakes to US$200 billion worth of goods – its annual imports from America total only about US$150 billion – it announced a plan last month that would see variable tariffs applied to an extra US$60 billion worth of US products. The duties would be in four bands, from 5 to 25 per cent, with the lower rates applied to items Beijing considers more important to its economy.
Besides the promise of retaliatory action, Gao said that China and the US should resume negotiations to resolve their trade disputes. However, both Trump and US Treasury Secretary Steven Mnuchin have stated publicly that they are not willing to talk to China about trade at the moment.
The conflict has already had a significant impact on China’s economic performance. A subindex of the purchasing managers’ index (PMI) that measures new export orders contracted for the third month in a row in August, pointing to a gloomy outlook for exporters in the months ahead.
Similarly, PMI data for Guangdong showed that manufacturing in the southern province, which is at the heart of China’s export industry, contracted in August for the first time in 29 months.
Gao said that Beijing was aware of the economic impact any additional tariffs would have and had already taken steps to stabilise growth.
“We are taking forceful measures to help both Chinese and foreign businesses in China to manage the impact,” he said.
“We have the confidence, the capabilities, and the methods to maintain steady and healthy economic growth.”
Gao did not specify what, if any, further steps the government might take.
He did, however, reiterate Beijing’s assertion that the US tariffs violated the rules of the World Trade Organisation, and said they damaged the interests of US consumers and global value chains.
This article US-China trade war: Beijing vows to hit back if Trump imposes new tariffs on US$200 billion of its goods first appeared on South China Morning Post
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