China threatens retaliation after US threatens tariffs

12 July 2018

China threatens retaliation after US threatens tariffs

In an escalation of their ongoing trade war, China has accused the United States of “typical bullying” and has warned it will hit back after the Trump administration threatened to impose 10% tariffs on USD $200 billion (AUD $270 billion) of Chinese imports.

China’s Ministry of Commerce said it is “shocked” by the “completely unacceptable” measures and intends to complain to the World Trade Organisation.

On Tuesday the US Government released a list of thousands of Chinese imports on which it is considering imposing new tariffs, including food products, tobacco, chemicals, coal, steel, aluminium, car tyres, furniture, wood products, handbags, suitcases, pet food, sporting equipment, carpets, doors, toilet paper, and cosmetics.

China’s Foreign Ministry says China needs to counter-attack to protect its interests.

“This is a fight between unilateralism and multilateralism, protectionism and free trade, might and rules,” said Foreign Ministry spokesperson Hua Chunying.

The Chinese Government has not announced what form its response will take, but has indicated that the countermeasures will be “qualitative”, which may mean increased inspections, delays in investment approvals, and consumer boycotts, rather than imposing reciprocal tariffs.

The US Government says its measures are overdue and necessary if China will not engage in genuine competition.

“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” US Trade Representative Robert Lighthizer said.

“Rather than address our legitimate concerns, China has begun to retaliate against US products.

“[T]here is no justification for such action.”

But businesses and lawmakers in the US do not appear as enthusiastic about imposing the tariffs as the President, even those from the same side of politics.

The Republican-controlled Senate voted 88–11 in favour of a non-binding resolution calling for Congress to have a role in implementing tariffs.

Senator Orrin Hatch, Chair of the Senate Finance Committee, said the announcement “appears reckless and is not a targeted approach”, while Speaker of the House of Representatives Paul Ryan, despite accusing China of unfair trade practices, said “I don’t think tariffs are the right way to go.”

A spokesperson for the US Chamber of Commerce, which has supported domestic tax cuts and reductions in business regulation, said: “Imposing [tariffs] on another $200 billion worth of products will raise the costs of everyday goods for American families.”