China objects to Fentanyl as ‘pretext’ for Trump’s tariff increases
Liu Pengyu says China is willing to build a “stable relationship” with the US and hopes that the effort will be reciprocal.
THE Chinese government objects that US President Donald Trump’s administration is using the fight against fentanyl as a “pretext” for the increasing tariffs on its goods, the spokesperson for the country’s embassy in Washington said on Thursday (Feb 20).
China “has provided tremendous support to the US to address this issue, to respond to this issue”, Liu Pengyu, the spokesperson, said during a briefing for reporters. The idea of using tariffs to address the fentanyl crisis “cannot hold”, he said.
Liu said China is willing to build a “stable relationship” with the US and hopes that the effort will be reciprocal. At the same time, he suggested China could bypass the US and work with the international community “to uphold this multilateral trading system and to promote this liberalisation, facilitation of the global trade” and investment.
Trump imposed tariffs of 10 per cent on Chinese goods in early February, citing the country’s failure to stem the tide of ingredients used to make illicit fentanyl. Kevin Hassett, Trump’s National Economic Council director, estimated during a White House news briefing on Thursday that the 10 per cent tariff would generate US$500 billion to US$1 trillion over the next 10 years.
The White House is looking for ways to cut expenses and raise revenue to extend or make permanent tax cuts that were enacted in 2017 during Trump’s first term. Hassett suggested that replacing income tax revenue with tariff revenue is a possibility, but current estimates for tariff revenue fall well short of the roughly US$4.5 trillion price tag for the tax cuts.
Trump has also suggested that a trade deal with China would be possible though he has not described the parameters of a potential deal, saying only that he has a “great” relationship with Chinese President Xi Jinping.
Tariffs “cannot solve the US’s domestic problems” Liu said, saying the levies would not hold back his country’s development and instead would ultimately hurt US consumers. BLOOMBERG
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