China Vows Retaliation After US Tariffs

Beijing, Apr 9 (PTI) China promised to take “resolute and forceful” measures to safeguard its interests after US tariffs totalling 104 per cent came into effect Wednesday but stopped short of announcing any new import taxes on America.

US President Donald Trump's explosive new tariffs on 60 countries came into effect just after midnight Wednesday US time.

The new tariff includes stiff new levies that will increase import taxes on Chinese goods by at least 104 per cent. The additional tariffs on China kicked in after Beijing refused to meet Trump's deadline to withdraw its own retaliatory levies on the US.

Asked why China has not slapped retaliatory tariffs after Tuesday's assertions to fight till the end and whether the two countries are holding talks to resolve the issue, Chinese Foreign Ministry spokesperson Lin Jian told a media briefing here “China continues to take firm and resolute measures to safeguard our legitimate rights and interests”.

"We will not tolerate any attempt to harm China's sovereignty, security and development interests”, he said.

"As for the dialogue you mentioned, if the US really wants to address the issue through talks it should take the attitude of equality respect and mutual benefit," he said.

"But right now, the US still abusing tariffs on China perusing maximum pressure and China opposes and never accepts such bullying and hegemonic acts," he said.

On April 2, the president imposed a 10 per cent global tariff on hundreds of countries and promised far steeper “reciprocal” tariffs on April 9 for nations that he maintains have “ripped off” America.

Since February, the president has imposed successive rounds of tariffs on China. On Wednesday, the minimum tax on Chinese imports hit 104 per cent.

There is no official clarification here as to why China has refrained from retaliating against Trump's additional tariffs.

China hit back at the US with 34 per cent tariffs on American goods in tit-for-tat retaliation hours after Trump announced 34 per cent tariffs on China on April 4.

Angry over China's retaliation, Trump further imposed 50 per cent tariffs taking the levies on China since he took over the second term to 104 per cent.

The total US tariffs on China amounted to 115 per cent if the levies imposed in his previous term in office were included, according to the Hong Kong-based South China Morning Post report.

Skirting questions on why China has not retaliated, Lin said China will not let anyone take away legitimate rights for development.

"We will not tolerate any attempt to harm China's sovereignty, security and development interests”, he said.

Reacting to Trump's threat, China's Commerce Ministry said on Tuesday China will never accept the "blackmail nature" of the US and vowed to fight against tariffs "to the end".

Trump's tariffs target about USD 430 billion in Chinese exports. US exports to China totalled USD 143 billion last year.

The US trade deficit with China last year totalled USD 295.4 billion, according to official figures.

China is one of the few countries that retaliated against Trump's global reciprocal tariffs. China's tariffs targeted mainly about USD 30 billion in agricultural imports, which could hurt American farmers, who are Trump's supporters.

Beijing also targeted export port control measures on certain rare earth metals aimed at hitting high-tech American defence, computers and smartphone industries.

The US is China's third largest export market.

Despite China putting up a brave front, there is considerable concern here about the impact of Trump's tariffs on China's economy which is struggling with a slowdown due to falling exports, lack of domestic and collapse of the housing market.

Larry Hu, chief China economist at investment bank Macquarie, estimated that Trump's latest tariffs could reduce China's exports by 15 percentage points and its gross domestic product (GDP) growth by 2-2.5 percentage points.

"The impact could manifest itself through multiple channels such as falling US demand for Chinese goods, the potential global economic slowdown and the hit on export re-routing," Hu wrote in a research report, the Hong Kong-based South China Morning Post reported on Monday.

Bracing for Trump's steep tariff China's central bank the People's Bank of China (PBOC) allowed the yuan to further weaken against the US dollar, setting its daily fixing rate – also known as the midpoint rate – at 7.2066 per USD to help better returns for its exports worldwide.

On Tuesday, Chinese Premier Li Qiang exuded confidence saying that China has “enough policy tools” in reserve and is “fully capable of countering external shocks”, meaning Trump's tariffs.

Li told European Commission President Ursula von der Leyen in phone talks that “the resolute measures taken by China are not only to safeguard its own sovereignty, security and development interests but also to defend international trade rules and international fairness and justice.”

China's macro policy this year has taken full account of various uncertainties and has sufficient reserve of policy tools to hedge against adverse external impacts, Li said, adding that China is fully confident in maintaining sustained and healthy economic development, state-run Xinhua reported.