China will fight back if US raises tariffs on imports

The ruling Communist Party's People's Daily newspaper said the size and strength of the Chinese economy meant it had little to fear from tariffs.
The ruling Communist Party's People's Daily newspaper said the size and strength of the Chinese economy meant it had little to fear from tariffs.PHOTO: AFP

Beijing warns Washington against hiking tariffs on $272b worth of goods tomorrow

China's Commerce Ministry said late yesterday that it will take retaliatory measures if Washington went ahead to raise tariffs on Chinese imports tomorrow.

"Escalating trade friction is not in the interests of people from both countries and around the world," it said on the eve of the latest round of trade negotiations in the US. China expresses deep regret."

It added: "If the US proceeds with raising tariffs, China will be forced to take the necessary countermeasures."

Earlier yesterday, Chinese state media said China will keep calm and carry on with trade negotiations despite the United States threatening to slap more tariffs on it. China's media had projected a blase attitude towards US President Donald Trump's looming tariff hike, which has threatened to overshadow the two days of planned talks that begin today.

Mr Trump, in a post on Twitter last Sunday, said he planned to raise tariffs tomorrow on US$200 billion (S$272 billion) worth of Chinese goods to 25 per cent from 10 per cent.

The ruling Communist Party's People's Daily newspaper said the size and strength of the Chinese economy meant it had little to fear from tariffs.

It cited healthy consumer and tourism spending over the extended Labour Day holiday, as well as strong first-quarter trade figures and job creation numbers to argue that Beijing had managed to mitigate the negative fallout of US-China trade frictions.

The reports came as major Asian stock markets continued to be in the red yesterday, and after the Shenzhen and Shanghai bourses saw their biggest single-day losses in three years earlier this week.

"A country with orderly industrial factors, strong production capacity and huge domestic demand potential will not be afraid of tariffs," it wrote.

"Just having a loud voice or making ruthless comments will not solve Sino-US trade issues," it added. "Neither is the big stick of tariffs a panacea."

The editorial echoed an opinion piece in the Global Times tabloid, which also called on the Chinese to remain calm.

It said that China wants to reach an agreement but is prepared for a temporary breakdown in talks.

Even if talks fail, the impact on China will be "controllable", it added.

"We maintain Chinese society should strongly support our country's strategy at this time; whatever happens, we are together with our country," it said.

"We should have the courage and endurance to bear the breakdown of negotiations and create a good condition for our government to safeguard our core interests."

The reports came as major Asian stock markets continued to be in the red yesterday, and after the Shenzhen and Shanghai bourses saw their biggest single-day losses in three years earlier this week.

But Chinese media was eager to delink market turmoil from uncertainties over the trade talks and to assuage investors worried of a repeat of the 2015 Chinese stock market sell-off.

Noting that the Shanghai Composite Index had risen 30 per cent since the start of the year, financial commentator Wang Huijing said markets had been due for a correction. "It is unlikely that markets will see a big drop like what happened in 2015," he told Jiangsu Public News.

A version of this article appeared in the print edition of The Straits Times on May 09, 2019, with the headline 'China will fight back if US raises tariffs on imports'. Print Edition | Subscribe