China warns US is 'opening fire' on global economy with tariff threat

China will "absolutely not" fire the first shot in a trade war with the United States, its finance ministry said on Wednesday.
A worker checks wheel hubs of baby carriages that will be exported at a factory in Hangzhou in China's eastern Zhejiang province, on June 4, 2018.
A worker checks wheel hubs of baby carriages that will be exported at a factory in Hangzhou in China's eastern Zhejiang province, on June 4, 2018. PHOTO: AFP

BEIJING (REUTERS, BLOOMBERG) - China’s commerce ministry said on Thursday (July 5) the United States is “opening fire on the entire world”, warning that Washington’s proposed tariffs on Chinese goods will hit international supply chains, including foreign companies in the world’s second-largest economy. 

As much as US$20 billion of $34 billion Chinese goods on which US will implement a 25-per-cent tariff beginning Friday are produced by foreign companies, including American companies, China's Commerce Ministry spokesman Gao Feng said at a regular press conference in Beijing.

China will continue to assess the impact of the trade dispute and will help firms cope with possible shocks, Gao said. 

“US measures are essentially attacking global supply and value chains,” Gao said. “To put it simply, the US is opening fire on the entire world, including itself.”

The comments come a day before Washington and Beijing pan to implement tariffs against each others’ goods amid an escalating trade conflict that has roiled financial markets. 

Gao told reporters that China’s foreign trade is expected to continue on a stable path in the second half, though investors fear a full-blown Sino-US trade dispute will deal a body blow to Chinese exports and its economy. 

In a statement, China’s customs agency said Chinese retaliatory tariffs on US$34 billion of US goods will take effect immediately after US tariffs on China goods kick in.

Washington has said it would implement tariffs on $34 billion of Chinese imports on July 6, and Beijing has vowed to retaliate in kind on the same day though it has said it will not be the first to pull the trigger.  It is the US who has "provoked" this trade war, and China is forced to retaliate, Gao said on Thursday.

European officials have told Reuters that China has put pressure on the European Union to issue strong joint statement against US President Donald Trump’s trade policies.  

Chinese stocks were mixed while the yuan slipped slightly against the dollar in early Thursday trade as a targeted cut of reserve requirements for banks took effect amid heightened the trade tensions.

China's exports to the US expanded 5.4 per cent in the first half, 13.9 percentage points lower than the same period last year, according to the General Administration of Customs.