US President Donald Trump has instructed officials to consider a further Sh10 trillion ($100 billion) of tariffs against China, in an escalation of a tense trade stand-off.
These would be in addition to the $50 billion worth of US tariffs already proposed on hundreds of Chinese imports.
China’s Ministry of Commerce responded, saying China would “not hesitate to pay any price” to defend its interests. Tit-for-tat trade moves have unsettled global markets in recent weeks.
The latest US proposal came after China threatened tariffs on 106 key US products.
In response toTrump’s latest announcement, Foreign Minister Wang Yi said, “China and the US as two world powers should treat each other on a basis of equality and with respect. “By waving a big stick of trade sanctions against China, the US has picked a wrong target.”
Ministry of Commerce Spokesman Gao Feng said: “We do not want to fight, but we are not afraid to fight a trade war.”
He said that if the US side ignores opposition from China and the international community and insists on “unilateralist and protectionist acts,” then China will “not hesitate to pay any price, and will definitely strike back resolutely... (to) defend the interests of the country and its people.”
Analysts have warned of the risk of a full-blown trade war for the global economy and the markets, and believe ongoing behind-the-scenes negotiations between the two giants are crucial.
Market reaction in Asia on Friday suggested investors were relatively untroubled by the latest twist in the trade row. Hong Kong’s Hang Seng index rose more than one per cent while Japan’s Nikkei index edged lower.
HOW HAS THIS UNFOLDED?
Earlier this year, the US announced it would impose import taxes of 25 per cent on steel and 10 per cent on aluminium. The tariffs were to be wide-ranging and would include China.
China responded last month with retaliatory tariffs worth Sh300 billion ($3 billion) of its own against the US on a range of goods, including pork and wine. Beijing said the move was intended to safeguard its interests and balance losses caused by the new tariffs.
Then the US announced it was imposing some Sh5 trillion ($50 billion) worth of tariffs on Chinese-made goods, blaming what it described as unfair Chinese intellectual property practices, such as those that pressured US firms to share technology with Chinese firms.
Mr Trump argues that because Beijing forces any US firms setting up shop in China to tie up with a Chinese company, US ideas are left open to theft and abuse.
Mr Trump reiterated in his statement that China’s “illicit trade practices” had been ignored by Washington for years and had destroyed “thousands of US factories and millions of American jobs”.