China on Friday vowed to fight back against US President Donald Trump’s abrupt decision to slap 10 percent tariffs on the remaining $300 billion in Chinese imports, a move that ended a month-long trade truce.
China’s new ambassador to the United Nations, Zhang Jun, said Beijing would take “necessary countermeasures” to protect its rights and bluntly described Trump’s move as “an irrational, irresponsible act.”
“China’s position is very clear that if US wishes to talk, then we will talk, if they want to fight, then we will fight,” Zhang told reporters in New York, also signalling that trade tensions could hurt cooperation between the countries on dealing with North Korea.
Trump said China had to do a lot in order to turn things around in the trade talks and repeated an earlier threat to substantially increase tariffs if they failed to do so.
“We can’t just go and make an even deal with China. We have to go and make a better deal with China,” Trump told reporters at the White House.
The US president stunned financial markets on Thursday by saying he plans to levy the additional duties starting Sept. 1, marking a sudden end to a truce in a year-long trade war between the world’s two biggest economies that has slowed global growth and disrupted supply chains.
US stocks extended their sell-off Friday on Trump’s tariff announcement. Yields on US and German debt plumbed multi-year lows amid a rush for safe-haven assets.
Earlier on Friday, Chinese Foreign Ministry spokeswoman Hua Chunying said China was holding firm to its position in the 13-month tariff brawl with the United States.
“We won’t accept any maximum pressure, intimidation or blackmail,” Hua told a news briefing in Beijing.
“On the major issues of principle we won’t give an inch,” she said, adding that China hoped the United States would “give up its illusions” and return to negotiations based on mutual respect and equality.
Retaliatory measures by China could include tariffs, a ban on the export of rare earths that are used in everything from military equipment to consumer electronics, and penalties against US companies in China, according to analysts.
Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal.
The 10 percent duties, which Trump announced in a series of Twitter posts after his top trade negotiators briefed him on a lack of progress in talks in Shanghai this week, would extend tariffs to nearly all Chinese goods that the United States imports.
White House economic adviser Larry Kudlow told reporters on Friday that the impact on consumers from the latest duties would be minimal, despite the fact that the $300 billion target list is nearly all consumer goods, from cellphones and laptop computers to toys and footwear.
“The president’s not satisfied with the progress on the trade deal,” Kudlow told Fox Business Network.
Apple Inc fell more than 2 percent after a similar fall on Thursday on concerns about tariffs on its core products. Bank of America Merrill Lynch analysts said on Friday that the tariffs could reduce the tech giant’s earnings by 50 to 75 cents a share, with the bulk of that from iPhone duties.
So far, Beijing has refrained from slapping tariffs on US crude oil and big aircraft, after cumulatively imposing additional retaliatory tariffs of up to 25 percent on about $110 billion of US goods since the trade war broke out last year.
China is also drafting a list of “unreliable entities” - foreign firms that have harmed Chinese interests. US delivery giant FedEx is under investigation by China.
“China will deliver each retaliation methodically, and deliberately, one by one,” ING economist Iris Pang wrote in a note.