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China vows to fight Trump tariffs 'to the end' as tension rises

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Reacting to the trade war fears, the US market opened lower on Friday with the Dow losing 234.05 points, or 0.96%, to 24,271.17. The S&P 500 fell 22.96 points to 2,639.88 and the Nasdaq dropped 78.46 points, to 6,998.10.

Washington

CHINA said it would counter US protectionism "to the end, and at any cost", as a war of words over President Donald Trump's proposed tariffs on Chinese imports escalated.

The statement from Beijing came after Mr Trump ordered his administration to consider tariffs on an additional US$100 billion in Chinese goods on Thursday, sending US stock futures tumbling. The US president cited "China's unfair retaliation" in response to his list of proposed tariffs earlier this week covering US$50 billion in Chinese products.

"The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people," the Commerce Ministry said in a statement on its website on Friday.

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China also called on the European Union (EU) to take a joint stand against US protectionism as the tit-for-tat trade rift between Washington and Beijing threatened to entangle Europe.

"China and the EU ... should take a clear stance against protectionism, jointly preserve the rules-based multilateral trade order, and keep the global economy on a sound and sustainable track," Zhang Ming, the head of the Chinese mission to the EU, said in a statement sent to AFP. "This is a joint responsibility of China and the EU. We must act together to make that happen," he added.

Mr Zhang firmly defended multilateralism and said "the United States turns its back on these globally recognised rules and its own commitment".

These "protectionist moves under the pretext of national security will undermine the credibility of the WTO-centred multilateral trade system, and the rules-based global trade order," he added.

Mr Trump's unexpected move threatens to unravel efforts by top US and Chinese trade officials to lower the heat and reach an agreement that could stave off an escalating conflict.

Administration officials have spent the past two days trying to tamp down fears of a trade war, with chief economic adviser Larry Kudlow saying on Thursday the US could still hammer out a deal with Beijing.

But Mr Trump said on Friday the US has already lost any trade war, as he defended his proposed tariffs against Chinese goods, saying the move might cause "a little pain" but the US will be better off in the long run.

"We've already lost the trade war. We don't have a trade war, we've lost the trade war," the US leader said in a radio interview with New York radio show, 77 WABC's Bernie & Sid. "I'm not saying there won't be a little pain, but the market has gone up 40 per cent, 42 per cent so we might lose a little bit of it. But we're going to have a much stronger country when we're finished. So we may take a hit and you know what, ultimately we're going to be much stronger for it," Mr Trump noted.

Reacting to the trade war fears, the US market opened lower on Friday with the Dow losing 234.05 points, or 0.96 per cent, to 24,271.17. The S&P 500 fell 22.96 points to 2,639.88 and the Nasdaq dropped 78.46 points, to 6,998.10.

"By fuelling uncertainty among market participants, fears of a 'trade war' have added to the volatility already witnessed earlier this year in equity markets," Benoit Coeure, a member of the European Central Bank's executive board, said in Cernobbio, Italy. "None of this supports growth and employment."

Mr Trump said US Trade Representative Robert Lighthizer would identify which new products may be subject to tariffs. He later stressed that any additional tariffs first would be subject to a 60-day public comment period. "No tariffs will go into effect until the respective process is complete," Mr Lighthizer said. The administration hasn't said when any of the proposed tariffs would go into force.

China said on Wednesday it would levy a 25 per cent tariff on about US$50 billion of US imports including soyabeans, automobiles, chemicals and aircraft. That was in response to Mr Trump's proposed tariffs targeting industries including aerospace, robotics and machinery.

Were China to want to match Mr Trump's latest threat, it wouldn't have enough American goods imports to target. It could take other measures like curbing package tours or student transfers to the US, or hamper American companies operating in China. BLOOMBERG, AFP, REUTERS