China rejects 'blackmail' over US tariffs

Ivan Schwartz
July 6, 2018

"However, if the Untied States adopts taxation measures, China will be forced to fight back to defend the core interests of the nation and the interests of the people", Commerce Ministry spokesman Gao Feng said, according to USA Today.

Mr Gao said the USA tariffs were not so much targetting China as they were the entire global supply chain, as numerous products on the list published by the U.S. government are made by United States and worldwide companies within China.

"While each measure on its own has small macroeconomic effects, the combination of the measures, the supply chain disruptions and the increased business uncertainty could spell trouble for the U.S. economy", Daco said.

China is poised to fire the opening salvo in an escalating trade dispute with the United States by bringing in 25% tariffs on $34bn of USA goods a day earlier than Washington. "China will not bow in the face of threats and blackmail", added Mr Gao.

The United States is "opening fire" on the world with its threatened tariffs, China warned on Thursday, saying no one wants a trade war but it will respond the instant US measures go into effect, as Beijing ramped up the rhetoric in the heated dispute.

The tariffs on Chinese goods come out of an investigation by the Trump administration into the theft of USA companies' intellectual property. Though he has called Chinese President Xi Jinping a "good friend", he has expressed no apprehension over what could happen in either country when the first tariffs land.

As the world's most powerful economy, the USA plays a vital role in global economic and trade rule-setting and it is always able to find seemingly plausible reasons for its initiative targeting China.

Despite the escalating rhetoric and explosive tweets, Senate Minority Leader Chuck Schumer, a Democrat, attacked Presdient Trump last week for not being tougher on China.

Beijing plans to fire back by hitting 545 American products such as SUVs, meat and seafood.

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The dispute reflects foreign frustration with China's state-led industrial development strategy, which Washington, Europe, Japan and other trading partners say hurt their companies and violate its market-opening commitments.

For instance, Trump announced that the U.S. would expand the use of the Committee on Foreign Investment in the United States, which could limit Chinese investment in USA companies.

US carmaker Ford Motor Co said on Thursday it has no plans now to hike retail prices of its imported Ford and Lincoln models in China, despite steep additional tariffs on imported USA vehicles set to come into play on Friday.

"We can no longer talk about whether a trade war will develop, only the scale of the conflict", Steve Barrow and Jeremy Stevens at Standard Bank wrote in a note this week.

And a US manufacturer that exports vehicles to China recorded a 98 percent jump in random border inspections over the past month, throwing the firm behind schedule.

Chinese stocks slipped on Thursday and the yuan steadied from earlier losses as a targeted cut of reserve requirements for banks took effect amid the heightened trade tensions.

The Chinese government has promised to respond with tariffs on equal measure soon after Trump's tariffs go into effect.

Trump has threatened other measures created to limit China's ability to access the US.

Chinese consumers and businesses will bear the brunt as prices rise thanks to higher tariffs. Later in the day, traders will get the minutes from last month's Federal Reserve meeting when it raised USA rates for a second time this year.

Other reports by GizPress

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