SINGAPORE/BEIJING (REUTERS) - Chinese Foreign Minister Wang Yi said on Thursday (Aug 2) tariffs will not resolve the trade imbalances that the United States says exist between the two economies and urged Washington to calm down and listen to the voice of the international community.
Speaking on the sidelines of a meeting with Asean foreign ministers, Wang said pressure from the United States would not have any impact on any trade negotiations.
The US Trump administration has sought to ratchet up pressure for trade concessions by proposing a higher 25 percent tariff on US$200 billion worth of Chinese imports.
US Trade Representative Robert Lighthizer said on Wednesday President Donald Trump directed the increase from a previously proposed 10-per-cent duty because China has refused to meet US demands and has imposed retaliatory tariffs on US goods.
The new duties could be implemented as early as next month. At the same time, the US indicated it is open to restarting formal negotiations with China, though Beijing must agree to open its markets to more competition and stop retaliating against US trade measures.
China's Commerce Ministry said on Thursday the country was ready to retaliate. “China has made full preparation for the US threats to escalate the trade war, and will have to retaliate to defend national pride and the people’s interests,” the ministry said in a statement day on its website.
“ The US is playing a carrot-and-stick tactic on China, but this approach is not going to work on China,” the Ministry said.
Chinese Foreign Ministry spokesman Geng Shuang reiterated at a regular news briefing that the US’ efforts at “blackmail” would fail.
“We would advise the US side to return to reason, and not blindly let emotions affect their decisions, because in the end this will harm themselves,” Mr Geng said.
Chinese shares fell yesterday, and so far this year, the Shanghai Composite Index has slumped more than 16 per cent, the world’s second-worst performing stock index.
The International Monetary Fund has cited escalating trade disputes as a growing downside risk that’s threatening the strongest global economic upswing in seven years.
There have been no formal talks between Washington and Beijing for weeks over Mr Trump’s demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.
Mr Geng said China’s door to dialogue on the trade dispute is open, but that it had to be based on mutual respect and equality.
“The current unilateral threats and pressure from the United States will only backfire,” he said.
The higher tariff rate, if implemented, would apply to a list of goods valued at US$200 billion identified by the USTR last month as a response to China’s retaliatory tariffs on an initial round of US tariffs on US$34 billion worth of Chinese electronic components, machinery, autos and industrial goods.
Trump has ultimately threatened tariffs on over US$500 billion in Chinese goods, covering virtually all US imports from China.
The USTR said it will extend a public comment period for the US$200 billion list to Sept 5 from Aug 30 due to the possible tariff rate rise.
The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.
Two Trump administration officials told reporters on a conference call that Mr Trump remains open to communications with Beijing and that through informal conversations the two countries are discussing whether a “fruitful negotiation” is possible.
China also left the door open for a resumption of negotiations. The Commerce Ministry’s statement yesterday left out language that had been used previously pledging to fight back using the “same scale, same intensity” as the US trade measures.