China and the United States are closer than ever to a trade war after Beijing accused US President Donald Trump of "extortion" following his threat to impose new tariffs on imported Chinese products.
On Monday, Trump asked US Trade Representative Robert Lighthizer to identify $200 billion worth of Chinese products for 10 percent additional tariffs if Beijing retaliated against previous targeting of $50 billion in imports.
China's Commerce Ministry said on Tuesday morning that it will take counter measures if the US publishes an additional tariffs list.
In a statement posted on its website, the ministry said China will protect its interests, taking both quantitative and qualitative measures against the move.
"This practice of extreme pressure and blackmail deviates from the consensus reached by both parties on many occasions and is disappointing for the international community," the Commerce Ministry said.
"The United States has initiated a trade war that violates market laws and is not in accordance with current global development trends," it said.
Beijing will respond by safeguarding the interests of China and its people and defending free trade, the statement added.
On Friday, when he announced a 25 percent charge for 50 billion Chinese imports for compensation of illegal possession of US intellectual and technological property, China warned that it would impose new fees if it decided to respond.
“Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States,” Trump said in a statement late Monday.
The National Retail Federation issued a statement after Trump said he is considering tariffs saying it has predicted this “tit-for-tat trade war.” It warned that US families are caught in the middle.
“Higher prices for everyday essentials and lost jobs threaten to sap the energy out of the strong US economy just as most Americans are starting to enjoy the benefits of historic tax reform. This reckless escalation is the latest reminder that Congress must step in and exert its authority on trade policy,” it added.
The Federation went on to say that imposing tariffs on an additional $100 billion of Chinese imports would bring the total impact to a $49 billion reduction in GDP and the loss of 455,000 jobs.
The National Retail Federation is the world’s largest retail trade association. Based in Washington, NRF represents discount and department stores, home goods and specialty stores.
In 2017, the US trade deficit with China reached more than $375 billion and Trump wants to force China to cut it by 200 billion dollars.
Economics professor at Shenzhen’s HSBC Business School Christopher Balding believes Beijing wants to “demonstrate that things will be done their way or not at all.”
“The trade relationship between the United States and China must be much more equitable,” Trump said in explaining his latest decision.
Trump stressed: “I have an excellent relationship with President Xi (Jinping), and we will continue working together on many issues. But the United States will no longer be taken advantage of on trade by China and other countries in the world.”
Friday's stand marked the end of the May 19 truce between the superpowers after tough negotiations between senior Chinese and US officials in Beijing and then in Washington.
By June 30, the US administration will also publish a list of restrictions it plans to impose on Chinese investments. The trade policy of the current US administration is worrisome among US farmers who may be most affected by Chinese actions. Automotive and aviation sectors are also concerned about the consequences of the dispute.
