China warns US ‘opening fire’ on world with tariff threats

BEIJING: The US is ‘opening fire’ on the world with its threatened tariffs, the Chinese government warned yesterday, saying Beijing will respond the instant US measures go into effect as the two locked horns in a bitter trade war.

The Trump administration’s tariffs on US$34 billion of Chinese imports are due to go into effect at 12.01am eastern time on Friday (0401GMT Friday), which is just after midday on Friday Beijing time.

US President Donald Trump has threatened to escalate the trade conflict with tariffs on as much as a total of US$450 billion in Chinese goods if Beijing retaliates, with the row roiling financial markets including stocks, currencies and global trade of commodities from soy beans to coal.

China has said it will not “fire the first shot”, but its customs agency made clear on Thursday that Chinese tariffs on US goods will take effect immediately after Washington’s duties on Chinese goods kick in.

Speaking at a weekly news conference, Chinese Commerce Ministry spokesman Gao Feng warned the proposed US tariffs would hit international supply chains, including foreign companies in the world’s second-largest economy.

“If the US implements tariffs, they will actually be adding tariffs on companies from all countries, including Chinese and US companies,” Gao said.

“US measures are essentially attacking global supply and value chains. To put it simply, the US is opening fire on the entire world, including itself,” he said.

“China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system.”

Asked whether US companies will be targeted with “qualitative measures” in China in a trade war, Gao said the government will protect the legal rights of all foreign companies in the country.

“We will continue to assess the potential impact of the US-initiated trade war on companies and will help companies mitigate possible shocks.”

Gao said China’s foreign trade is expected to continue on a stable path in the second half, though investors fear a full-blown Sino-US trade dispute will deal a body blow to Chinese exports and its economy.

He emphasised that US tariffs on Chinese exports will hurt both Chinese and foreign firms.

Foreign companies accounted for US$20 billion, or 59 per cent, of the US$34 billion of exports from China that will be subject to new tariffs from the US starting from Friday, with US firms accounting for a significant part of that 59 per cent, Gao added.

The World Trade Organisation warned on Wednesday that trade barriers being erected by major economies could jeopardise the global economic recovery, with their effects already starting to show.

European officials have told Reuters that China has put pressure on the European Union to issue a strong joint statement against US President Donald Trump’s trade policies, but so far they have insisted on not taking sides.

Chinese stocks slipped on Thursday and the yuan gave back some of its recent gains against the dollar as a targeted cut of reserve requirements for banks took effect amid heightened the trade tensions.

China’s central bank moved to calm jittery financial markets on Tuesday after the yuan dropped through the psychologically significant 6.7 to the dollar mark, hitting its lowest in almost a year.

An outright trade war with the United States could hit China’s export machine, with recent data pointing to fatigue as credit expansion slowed and domestic demand looked to be softening.

China’s second-quarter economic growth is expected to have slowed slightly from the previous quarter, a Reuters poll showed, as policymakers seek to mitigate the impact from a de-risking drive and the trade dispute with the United States. On Thursday, China’s state media lambasted the US. — Reuters