China warned on Friday it was fully prepared to respond with a “fierce counter strike” of fresh trade measures if the US follows through on President Donald Trump’s threat to slap tariffs on an additional $100 billion of Chinese goods.
Trump, in light of what he called China’s “unfair retaliation” against earlier US trade actions, had upped the ante on Thursday by ordering US officials to identify extra tariffs, escalating a tit-for-tat confrontation with potentially damaging consequences for the world’s two biggest economies.
China’s Commerce Ministry spokesman, Gao Feng, called the US action “extremely mistaken” and unjustified, adding that the spat was a struggle between unilateralism and multilateralism. He also said no negotiations were likely in the current circumstances.
“The result of this behaviour is to smash your own foot with a stone,” Gao told a news briefing in Beijing.
“If the United States announces an additional $100 billion list of tariffs, China has already fully prepared, and will not hesitate to immediately make, a fierce counter strike.” While US officials said they were prepared to talk the issues through with China, there was no clear path to communication.
Both Treasury Secretary Steve Mnuchin and Trump economic advisor Larry Kudlow were on television to promote the idea of talks, with Mnuchin telling CNBC “we are in communication regularly”.
Gao was speaking shortly after Trump defended his proposed tariffs on US radio, saying the move might cause “a little pain” but the US will be better off in the long run.
Asked in an interview with New York station WABC about the effect on US stock markets, Trump said the market has gone up (since he took office) “so we might lose a little bit of it.” “So we may take a hit and you know what, ultimately we're going to be much stronger for it.”
Key events in rapid escalation of US-China trade dispute
March 8: Trump announces import tariffs of 25% on steel and 10% for aluminium; exempts Canada and Mexico
45 US trade associations representing some of the largest companies in the country urge Trump not to impose tariffs on China, warning it would be “particularly harmful” to the US economy
April 1: China increases tariffs by up to 25% on 128 US products, from frozen pork and wine to certain fruits and nuts. They were slated to take effect on April 2
April 3: Trump raises the stakes, proposing 25% tariffs on some 1,300 industrial technology, transport and medical products to try to force changes in Beijing’s intellectual property practices
April 4: China announces it will impose additional tariffs of 25% on 106 US goods including soybeans, autos, chemicals. The products targeted by the tariffs were worth $50 billion in 2017
April 5: The World Trade Organization says China sought consultations with the US, the first step in a WTO dispute, over Washington’s announced tariffs on the $50 billion worth of Chinese imports
The notification to the WTO triggers a 60-day deadline for the two sides to settle the complaint or face litigation
Trump says he has instructed US trade officials to consider $100 billion in additional tariffs on China
Financial markets have been roiled by the prospect of threats becoming action and US stocks tumbled on Friday as investors worried about an escalating trade war.
Kudlow told Bloomberg Television Trump and America’s top trade official Robert Lighthizer were “thinking about submitting a list of suggestions to the Chinese.”
On Wednesday, China unveiled a list of 106 US goods including soybeans, whiskey, frozen beef and aircraft targeted for tariffs, just hours after the Trump administration proposed duties on some 1,300 Chinese industrial, technology, transport and medical products.
Washington called for those $50 billion in extra duties after it said an investigation had determined that Chinese government policies are designed to transfer US intellectual property to Chinese companies and allow them to seize leadership in key high-technology industries of the future.
China said it was not afraid of a trade war, even though it did not seek one, and accused the United States of provoking the conflict. Gao said comments from US officials about ongoing talks about trade issues were incorrect.
“Under these conditions, the two sides cannot conduct any negotiations on this issue,” Gao said, without elaborating.
Kudlow, who has repeatedly sought this week to soothe markets with mention of possible talks, told Bloomberg Television there were always ongoing discussions on trade between the US and China but that negotiations on the tariffs had not begun.