China has warned the US that there will be consequences if it does not end its ‘wrong actions’ after Washington’s decision to levy additional tariffs on $550 billion worth of Chinese goods.
The comments made by China’s Ministry of Commerce came after the President Donald Trump announced on Friday that Washington will impose an additional 5 percent duty the Chinese goods.
In a tit-for-tat move in the bilateral trade dispute, Beijing had announced just hours earlier its latest retaliatory tariffs on about $75 billion worth of US goods.
‘Such unilateral and bullying trade protectionism and maximum pressure violates the consensus reached by head of China and United States, violates the principle of mutual respect and mutual benefit, and seriously damages the multilateral trade system and the normal international trade order,’ China’s commerce ministry said in a statement on Saturday.
‘China strongly urges the United States not to misjudge the situation or underestimate determination of the Chinese people,’ it added.
China has warned that there will be consequences for the ‘wrong actions’ Washington’s decision to levy additional tariffs on $550 billion worth of Chinese goods, which was announced by President Donald Trump on Friday
Trump is scheduled to meet with Chinese officials in September. In this file photo, Trump, left, meets with Chinese President Xi Jinping at the G-20 summit in Osaka, Japan on June 29, 2019.
Trump’s latest tariff move, announced on Twitter, said the US would raise its existing tariffs on $250 billion worth of Chinese imports to 30 percent from the current 25 percent beginning on October 1, the 70th anniversary of the founding of the communist People’s Republic of China.
At the same time, Trump announced an increase in planned tariffs on the remaining $300 billion worth of Chinese goods to 15 percent from 10 percent.
The tariffs on some products will come into effect on September 1, but tariffs on about half of those goods have been delayed until December 15.
Trump was responding to Beijing’s decision on Friday night that it was planning to impose retaliatory tariff on $75 billion worth of US imports ranging from soybean to ethanol.
China will also reinstitute tariffs of 25 percent on cars and 5 percent on auto parts, which was suspended last December.
This prompted Trump to order American companies out of China.rump has claimed that has the ‘absolute right’ to order companies to stop doing business with China that would involve using his broad executive authority in a new and unprecedented way under a 1977 law.
He told reporters while boarding Air Force One on Friday night that: ‘I have the absolute right to do that, but we’ll see how it goes.’
Trump then got on Twitter to explain: ‘For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!’
The International Emergency Economic Powers Act (IEEPA) passed in the wake of Watergate and Vietnam.
It can gives Trump the ‘authority to regulate a variety of economic transactions following a declaration of national emergency’ according to an analysis by the CRS.
Those presidential powers can be used ‘to deal with any unusual and extraordinary threat… to the national security, foreign policy, or economy of the United States.’
Trump handpicked Federal Reserve chairman Jay Powell, who he launched a furious attack against when Powell offered no clear indication how he act on further rate cuts
The trade war set off a precipitous dive in financial markets on Friday after Trump ripped into Federal Reserve chair Jerome Powell who refused to provide a clear signal he will bend to Trump’s demand for rate cuts.
On Friday night, before he departed for the G7 summit in Biarritz, France, Trump told reporters: ‘We’re having a little spat with China, and we’ll win it.’
Trump said his economic policies have boosted Wall Street and instead called for Powell’s head to roll over market fluctuations.
‘Let me put it this way: If he [resigned], I wouldn’t stop him,’ he said hours after a selloff that caused the Dow to drop 623 points and stocks to lose billions of dollars in value.
Earlier on Friday, and minutes after Powell released a speech on the economy, Trump launched an attack against him on Twitter, saying: ‘My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?’ Trump compared him to China’s President Xi Jinping, his chief economic and political rival.
The furious attack came after Powell offered no clear indication about how he plans to act on further rate cuts Friday despite relentless pressure from Trump.
‘We will act as appropriate to sustain the expansion,’ Powell said in remarks at a meeting of the Fed in Jackson Hole, Wyoming.
Trump’s attack on the Fed was followed by series of blistering tweets against China and a threat to respond to fresh tariffs Friday – as well as a demand that U.S. companies begin looking at a China pull-out despite having no apparent authority to do so.
After experiencing a steep drop earlier in the day after Trump’s initial comments, the Dow Jones Industrial average was down more than 600 points at the close of trading Friday afternoon.
Trump blasted China following its imposition of new retaliatory tariffs on US products – saying US companies are ‘hereby ordered’ to begin seeking alternative places to do business.
Trump misspelled the name of Powell, his own hand-picked nominee to the powerful Fed position.
He also blasted China again in late-afternoon tweets. ‘For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight,’ he wrote.
‘Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer,’ he continued, using the slogan for conservative Fox News. ‘As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very… unfair Trading Relationship.’
He vented: ‘China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!). Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%.’
‘Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!’ Trump concluded.
The market reaction was swift and brutal. The Dow dropped 400 points after Trump went after China, then was down more than 500 by mid-afternoon.
The sell-off began when Trump tweeted Friday: ‘Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far … better off without them,’ Trump said of the world’s second-largest economy and top trading partner.
The White House economic adviser said earlier in the week the Trump administration was planning in-person talks between with Chinese officials in September. It is unclear if the bilateral meeting would still take place.
The year-long trade war between the world’s two largest economies has roiled financial markets and shaken the global economy.