China says addt’l tariffs will only raise costs for domestic US Consumers

BEIJING: China’s top envoy called on the United States to remain “cool-headed” on Thursday as Washington threatened to raise the tariff rates on another $200 billion worth of Chinese imports.

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Slapping additional tariffs on Chinese imports – 60 per cent of which are made by foreign firms, including American companies – will only raise costs for domestic US consumers, said Chinese Foreign Minister Wang Yi.

“We hope that the trade policy makers in the US will be cool-headed, listen to the voice of US consumers and also pay attention to the voices in the international community,” Wang said.

“The US has no regard for the world; playing both soft and hard ball with China will have no effect and only serve to disappoint the countries and territories opposed to a trade war,” China’s Ministry of Commerce said in a statement, adding that it still hopes to turn the situation around.

President Donald Trump asked US Trade Representative to consider increasing the proposed tariffs to 25pc from the planned 10pc, USTR Robert Lighthizer said on Wednesday.

“We have been very clear about the specific changes China should undertake.

“Regrettably, instead of changing its harmful behaviour, China has illegally retaliated against US workers, farmers, ranchers and businesses,” Lighthizer said in a statement.

Officials, however, downplayed suggestions that the move was intended to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Trump’s tariffs by making imports cheaper.

The US dollar has been strengthening since April as the Fed continues to raise lending rates drawing investors looking for higher returns.

Washington and Beijing are locked in a battle over American accusations that China’s export economy benefits from unfair policies and subsidies, as well as from the theft of American technological know-how.

Trump has threatened to slap tariffs on virtually all of China’s exports to the US.

Officials said they remained in regular contact with their Chinese counterparts but could announce no new meeting.

Wang, who is in Singapore for a foreign ministers’ meeting, said the spat will not affect diplomatic cooperation with Washington on North Korea.

In a tweet last month, US President Donald Trump suggested that China could be undermining a North Korean denuclearisation deal because of the ongoing trade war.

Boxed into a corner?

The US has already imposed 25pc tariffs on $34b worth of Chinese imports, with another $16b to be targeted in coming weeks.

On July 10, Washington unveiled a list of another $200b of Chinese goods, in areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10pc import duties. Increasing the rates to 25pc could make them significantly more painful for China.

Much of American industry and many members of Trump’s own Republican Party have expressed outrage but have so far been unable to thwart his trade policies.

The US Senate last week passed legislation which if enacted would lower trade barriers on hundreds of Chinese imports. Jake Colvin, vice president of the National Foreign Trade Council, said the Trump administration could be boxing itself into a corner.

“It’s hard to see how this action lends itself towards a resolution to what is increasingly becoming a trade crisis,” he told AFP.

Trump and senior administration officials believe that the volume of US imports and vigorous health of American economy give Washington an advantage in the current confrontation.

 

-AFP

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