China on Friday announced retaliatory tariffs on $60 billion worth of United States goods ranging from liquefied natural gas (LNG) to some aircraft and warned of further measures, signalling that it won't back down in a protracted trade war with Washington.
The Trump administration ramped up pressure for trade concessions from Beijing this week by proposing a higher 25 per cent tariff on $270 billion worth of Chinese imports.
The retaliation stands to further inflame tensions between the world's two biggest economies and echoes China's response to the previous round of tariffs which took effect last month.
In July, Washington fired the first salvo in the escalating trade war with Beijing by introducing 25 percent tariffs on Chinese imports worth $34 billion.
After talks between Washington and Beijing broke down in May, some see this as the Trump administration's way of forcing China back to the negotiating table.
China's state media said on Saturday (Aug 4) the government's retaliatory tariffs on US$60 billion (S$82 billion) in U.S. goods showed rational restraint, although in an opinion piece it still admonished the United States for blackmail and bullyboy tactics. Mr Trump is aiming to reduce his country's $375.6 billion trade deficit in goods - the gap between imports and exports - with China. Taken in totality, the new Chinese proposals will cover $60 billion in USA imports.
Trump has threatened tariffs on over $500 billion in Chinese goods, covering virtually all US imports from China.
"I told you, some people say, there has been more than 30 phone calls between Trump and Xi". Last month, the International Monetary Fund warned that escalating trade conflicts following US tariff actions on its trading partners threaten to derail the global economic recovery.
China has now either imposed or proposed tariffs on $110 billion in US goods, representing the vast majority of China's annual imports of American products. Last year, China imported about $130 billion of United States goods.
However, "considering the unreasonable USA demands, a trade war is an act that aims to crush China's economic sovereignty, trying to force China to be a USA economic vassal just like Japan accepted the Plaza Accord".
Today's threat targeting a smaller amount of US goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.
"China has made it very clear it is going to boost infrastructure investment for the second half of the year", said ANZ's Wang.
"We've been ripped off by China for a long time", Trump declared during the interview. In fact, some argue that a larger trade deficit actually displays signs of a stronger U.S. economy.
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