‘Totally unacceptable’: Beijing vows retaliation if USA taxes $200bn of Chinese goods

Chairman Xi speaks at the National People’s Congress in Beijing

Chairman Xi speaks at the National People’s Congress in Beijing

And European officials have said Beijing is trying to woo the EU with market access in return for standing with China against Trump's trade measures, though the Europeans, who share us criticism of China but disapprove of Trump's tariffs, have largely refrained from taking sides.

The US Trade Representative (USTR) announced Tuesday a possible second round of tariff hikes targeting a $200 billion list of Chinese goods ranging from burglar alarms to mackerel.

"This act is typical trade bullying", a spokesperson for China's Ministry of Commerce said in a statement.

Both the yen and the dollar act as safe-haven investments but analysts say the strength of the United States dollar against the yen means investors have faith in the United States economy rather than seeking safety.

China gave no details but earlier threatened "comprehensive measures" if Washington took more action. "If the USA goes ahead with more, China needs a combination of tools and it is prudent to guard against downside risk to growth too".

The eventual goal is to impose tariffs on 40% of Chinese imports, the same proportion of USA goods hit by Beijing's retaliation, an official told reporters.

However, in a statement this morning the Chinese ministry of commerce hit back, saying: "China is shocked by USA behaviour".

The news could "bring some negative emotion to financial markets in the short term, but over the long run, fundamentals of Chinese financial markets have not changed, and (investors) shouldn't over-value its impact", Guan Tao, former director of the global payments department at China's State Administration of Foreign Exchange (SAFE) was quoted as saying by the state-owned Xinhua news agency.

If China responds with tariffs on energy, this could cut sales of USA energy goods, analysts and executives told Reuters last month, when Beijing first threatened to slap tariffs on us energy. The Trump administration has tried to limit the impact of the trade war on consumers and any backlash that it might prompt, but the scale of these tariffs make it next to impossible to protect them.

These tactics include the outright theft of trade secrets, government subsidies to homegrown tech firms and demands that US and other foreign companies hand over technology if they want access to China's vast market.

Chinese bureaucrats could make life very hard for these companies if they chose to, Ross says.

The official added that China has not been prepared to talk about Made in China 2025, a government plan to make the country a global leader in industries of the future such as robotics, electric cars and computer chips. In language similar to that directed against North Korea and its nuclear program, it has demanded that China take "immediate, verifiable steps" to ensure the cessation of Chinse government-conducted, sponsored or tolerated measures targeting U.S. trade secrets and technology.

Such language, if passed, would not affect these tariffs against Beijing, but could affect penalties in place on almost all imports of steel and aluminium - from China as well as United States allies like Canada, Mexico and the EU.

Jack Gerard, Cal Dooley, and Edward R. Hamberger-the president and CEO of the American Petroleum Institute, president and CEO of the American Chemistry Council, and president and CEO of the Association of American Railroads, respectively-wrote in an opinion piece in the Washington Examiner published on Wednesday that the trade war is threatening the USA economy and could add "hundreds of billions of dollars in potential costs for American businesses - costs that could ultimately be borne by consumers". Especially the issue of technology development is regarded as a threat both to the economic and ultimately military dominance of the US.

One senior European official commented that North Atlantic Treaty Organisation members are preparing for a worst-case scenario should Mr Trump repeat his threat to end or curtail defence cooperation, with allies not on track to hit their defence funding target of 2% of GDP by 2024. If undertaken, the listed products will face an additional 10 percent rise in tariffs.

China retaliated in lockstep against the initial $34 billion - a move that directly led to Trump's latest threat - and has pledged to do the same with the looming $16 billion.

In fact, Hatch indicated that he wants more severe measures.

House ways and means chairman Kevin Brady urged Mr Trump and Chinese President Xi Jinping "to meet soon face-to-face to craft a solution to establish a fair and lasting trade relationship between our two countries".

Oil prices were also hit by the trade war concerns.

One of Canada's top economists says Canada is caught in the crossfire of a U.S. The prices of everyday products would rise and "the retaliation that will follow will destroy thousands of United States jobs and hurt farmers, local businesses and entire communities".

Adding duties on another $200 billion in imports from China could meaningfully increase the effect of the trade war.

But senior Trump administration officials said on a call with reporters Tuesday that so far, the two sides haven't gotten anywhere.

But even those who agree with the administration on its principles in cracking down on China are increasingly uneasy with the president's inclination to impose tariffs on an ever-increasing number of products.

China hasn't yet clarified how it will respond to the latest salvo.

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