Anamika Dey, editor
Synopsis
- China’s Ministry of Commerce strongly opposes President Trump’s recent tariff threats and vows to retaliate if necessary, urging the U.S. to resolve conflicts through dialogue.
- In response to the proposed tariffs, China may raise tariffs on U.S. imports, add American firms to an unreliable entity list, and tighten export controls on critical minerals.
- The statement from China reflects a more assertive stance compared to previous responses, emphasizing the need to defend national interests and warning that U.S. actions could disrupt global supply chains.
Detailed
The Ministry of Commerce of China issued a statement on Friday stating that it “firmly opposes” the latest threat made by President Donald Trump of the United States to increase tariffs on Chinese exports and that it has pledged to retaliate, if necessary.
A representative for the Ministry of Commerce issued a statement that was translated by CNBC. The statement stated that China would take all necessary countermeasures to defend its legitimate rights and interests in the event that the United States continued to insist on its own path.
“We strongly urge the United States side to avoid making the same mistakes that it has made in the past and to get back on track as quickly as possible on the path of effectively resolving conflicts through dialogue on an equal footing.”
Following Trump’s announcement on Thursday that the United States would apply an additional 10% duty on Chinese goods on March 4, which coincides with the beginning of China’s annual legislature meetings, the statement was issued.
It is expected that the new duties would be added to the 10% additional tariffs that President Trump imposed on China on February 4th.
President Trump made the announcement that two rounds of tariffs will be levied on China as a response to the role that the Asian nation plays in the trade of fentanyl. The addictive substance, the precursors to which are primarily produced in China and Mexico, is responsible for tens of thousands of deaths in the United States that occur as a result of overdoses each year.
“In the short term, China’s response will likely include raising tariffs on select U.S. imports, adding more American firms to its unreliable entity list, and possibly further tightening export controls on critical minerals,” said Neil Thomas, a fellow on Chinese politics at the Asia Society, in an email. Thomas is a member of the Asia Society.
As a result of the fact that Chinese President Xi Jinping has an incentive to meet with his American counterpart and commence negotiations in order to prevent measures that put more pressure on already slow economic growth, he added that he expects Beijing’s reaction to remain “measured.”
Within the context of an economy that is generally slowing down, China’s exports have been a rare bright light. On a single-country basis, the United States of America is China’s most important commercial partner.
The chairman of the China Center at The Conference Board, Alfredo Montufar-Helu, stated that next actions will most likely target industries that are of the utmost importance to Trump supporters. This is despite the fact that Beijing may continue to maintain a “restrained” position.
To avoid further greater import tariffs and other “corrective” steps by the United States government, China would prefer to leave some opportunity for further negotiations, according to him. China wishes to avoid these measures.
China’s retaliatory steps included increasing charges on certain energy imports from the United States and placing two American businesses on a list of untrustworthy enterprises, which might impede their ability to conduct business in the Asian nation. These measures were instituted after the initial round of tariffs was implemented earlier this month.
Additionally, China has tightened its regulations on the export of vital minerals that are required by the United States.
“The sharpest arrow that China has in its quiver would be to restrict U.S. access to critical minerals that can’t readily be sourced elsewhere,” said Stephen Olson, a visiting senior scholar at the Institute of Southeast Asian Studies and a former trade negotiator for the United States of America.
A more forceful tone
Although there was a dearth of specifics, the statement that was released by the Ministry of Commerce on Friday struck a more forceful tone than the response that the country had given to the original 10% tariffs earlier this month.
The Ministry of Defense defended China’s attempts to restrict drug use and referred to the most recent tariff threat, which was based on the illegal supply of fentanyl, as “purely shifting the blame” without contributing to the United States’ efforts to address its own drug issues. Additionally, it condemned the new taxes, stating that they “added to the burdens that are already being placed on American businesses and consumers and disrupted the global supply chain.”
It was stated by Montufar-Helu that the most recent communication “sends a clear message that the Chinese government is ready to respond in defense of national interests, and they won’t ‘bend the knee.'”
On the other hand, the statement issued by the ministry on February 2 encouraged the United States government to handle fentanyl issues in a “objective and rational” manner, while also warning that the tariffs might potentially undermine regular economic and trade relations between China and the United States.
In reaction to the duties that were implemented on Friday, the Ministry of Foreign Affairs of China likewise adopted a more resolute stance. Lin Jian, a spokesperson for the United States, stated in Chinese statements that were broadcast by official media and translated by CNBC that the United States’ attempt to “pressurize, coerce, and threaten” China with tariffs can only result in negative consequences.
Deborah Elms, who is the head of trade policy at the Hinrich Foundation, told CNBC that the introduction of further tariffs by President Trump will “push China into a position of assuming that a deal may not be possible or may not be achievable in the near term.”
Since the previous “modest measures weren’t enough and the threat for future escalation wasn’t taken seriously enough,” she continued, “that leaves Beijing with two options: either roll out continued measured responses in the hope of avoiding further escalation and possibly even rolling back existing measures; or go much bigger?” Beijing has two options to choose from.
There is a possibility of additional levies.
In 2020, when Trump was just beginning his second term as president, he gave his government the order to investigate whether or not Beijing was complying with a trade agreement that had been reached during his first term. Before the first of April, the full outcome of the evaluation will be submitted to President Trump.
This might pave the way for more acts of what President Trump referred to as “reciprocal tariffs,” which involve increasing penalties on a variety of countries, including China, to match the levies that they already impose on imports from the United States.
It was confirmed by the President of the United States of America in a message that was published on social media on Thursday that “The April Second Reciprocal Tariff date will remain in full force and effect.”
Source : CNBC news
