China warns US it will respond if trade probe spurs new tariffs

BEIJING – China warned that it will take “all necessary measures” if the US uses a probe into a 2020 trade deal to impose fresh tariffs, after Washington signalled the investigation would continue.

In a statement on Feb 25 responding to comments by US Trade Representative Jamieson Greer, China’s Commerce Ministry said Beijing has honoured the Phase One agreement despite the pandemic disruption, and has complied with pledges it made on intellectual property and the opening of financial and agricultural markets.

It also accused the US of undermining implementation by tightening export controls, restricting two-way investment and expanding other curbs that it said obstruct normal trade and investment, adding that a 2025 white paper set out its case.

“If the US insists on pushing forward with relevant investigations, or even uses the investigation as a pretext to introduce restrictive measures such as tariffs, China will take all necessary measures to resolutely defend its legitimate rights and interests,” the ministry said.

The exchange injects some uncertainty into bilateral ties just weeks before US President Donald Trump is set to visit Beijing, the first trip by an American president since his last visit in 2017. It comes soon after the Supreme Court invalidated his broad emergency tariffs, eliminating Mr Trump’s second-term tariffs on China and leaving Beijing facing a lower fee than applied to US allies.

Mr Greer said the administration can pursue duties under a legal provision known as Section 301 and other statutes after the ruling, and the USTR opened its Phase One compliance investigation in October.

The Commerce Ministry urged Washington to assess the deal “objectively and rationally” and avoid shifting blame, saying it wants to use the consultation mechanism to focus on existing consensus and look to the future. BLOOMBERG