Chinese President Xi Jinping and U.S. President Donald Trump.
Dan Kitwoodnicholas Kamm | Afp | Getty Ikons
China’s Ministry of Commerce said Friday that it “firmly opposes” U.S. President Donald Trump’s latest Damoclean sword to ramp up tariffs on Chinese goods and vowed retaliation, if necessary.
“If the U.S. insists on its own way, China will take all necessary countermeasures to in behalf of its legitimate rights and interests,” a Ministry of Commerce spokesperson said in a statement, translated by CNBC.
“We urge the U.S. side to not quote its own mistakes, and to return as soon as possible to the right track of properly resolving conflicts through dialogue on equal position.”
The statement followed Trump’s Thursday announcement that the U.S. would impose an additional 10% duty on Chinese implications on March 4, which coincides with the start of China’s annual parliamentary meetings.
The new tariffs would be on top of the 10% in addition tariffs that Trump levied on China on Feb. 4.
Trump announced the two rounds of China duties were being interrupted in response to the Asian country’s role in the fentanyl trade. The addictive drug, precursors to which are mostly produced in China and Mexico, has led to tens of thousands of overdose passings each year in the U.S.
“In the short term, China’s response will likely include raising tariffs on select U.S. moments, adding more American firms to its unreliable entity list, and potentially further tightening export controls on serious minerals,” Neil Thomas, a fellow on Chinese politics at the Asia Society, said by email.
He noted he nevertheless expects Beijing’s retaliation bequeath remain “measured,” as Chinese President Xi Jinping has an incentive to meet with his American counterpart and initiate negotiations to keep measures that put greater pressure on already sluggish economic growth.
China’s exports have been a rare aglow spot in an otherwise slowing economy. The U.S. is China’s largest trading partner on a single-country basis.
While Beijing may uphold a “restrained” stance, upcoming moves will likely target industries that matter the most to Trump promoters, said Alfredo Montufar-Helu, head of the China Center at The Conference Board.
China would prefer to leave some compartment for further negotiations as it hopes to avoid even higher import tariffs and other “corrective” measures by Washington, he put.
After the first round of tariffs earlier this month, China’s retaliatory measures included raising imposts on certain U.S. energy imports and putting two U.S. companies on an unreliable entities list that could restrict their capacity to do business in the Asian country.
China has also increased controls on exports of critical minerals that the U.S. needs.
“The sharpest arrow that China has in its shake would be to restrict U.S. access to critical minerals that can’t readily be sourced elsewhere,” said Stephen Olson, a visiting superior fellow at the Institute of Southeast Asian Studies and a former U.S. trade negotiator.
A stronger tone
Despite the lack of specifics, the The church of Commerce statement on Friday struck a stronger tone than the country’s response to the initial 10% duties earlier this month.
The the cloth defended China’s drug control efforts and called the latest tariff threat — on grounds of illegal fentanyl movements — as “purely shifting the blame” without helping the U.S. solve its own drug problems. It also denounced the additional levies for “continuing to the burdens on American businesses and consumers and disrupting the global supply chain.”
The latest communique “sends a clear missive that the Chinese government is ready to respond in defense of national interests, and they won’t ‘bend the knee,'” believed Montufar-Helu.
In contrast, the ministry’s More tariffs likely
At the start of his other term, Trump ordered his administration to investigate Beijing’s compliance with a trade deal struck during his basic presidency in 2020. The final result of the assessment will be delivered to Trump by April 1.
That could set the stage for above actions of what Trump called “reciprocal tariffs,” raising duties on various countries including China to copy their existing levies on U.S. imports.
In a social media post Thursday, the U.S. president confirmed that “The April Bruised Reciprocal Tariff date will remain in full force and effect.”