BEIJING/WASHINGTON • China said yesterday that "blackmail" would not work and that it would hit back should the United States take further steps to hinder trade, as the Trump administration considers slapping a 25 per cent tariff on US$200 billion (S$272 billion) worth of Chinese goods.
The proposal would increase the potential tariff rate from the 10 per cent that the administration had initially put forward on July 10 for that wave of duties in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday.
The tariffs target thousands of Chinese imports, including food products, chemicals, steel and aluminium, and consumer goods ranging from dog food, furniture and carpets to car tyres, bicycles and beauty products.
While the duties would not be imposed until after a period of public comment, raising the proposed level to 25 per cent would escalate the already bitter trade dispute.
China, which has accused the US of bullying, yesterday vowed to retaliate if President Donald Trump proceeds with the measures.
"US pressure and blackmail won't have an effect. If the United States takes further escalatory steps, China will inevitably take counter-measures and we will resolutely protect our legitimate rights," Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing.
Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent US business groups, while weary of what they see as China's mercantilist trade practices, have condemned Mr Trump's aggressive tariffs.
Ms Erin Ennis, senior vice-president of the US-China Business Council, said a 10 per cent tariff on these products is already problematic, and 25 per cent would be much worse.
"Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods," Ms Ennis said. "The cost increases will be passed on to customers, so it will affect most Americans' pocketbooks."
Mr Trump had said he would implement the US$200 billion round as punishment for China's retaliation against the initial tariffs aimed at forcing change in China's joint venture, technology transfer and other trade-related policies.
He also has threatened a further round of tariffs on US$300 billion of Chinese goods.
Representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice-premier Liu He have been speaking privately as they seek to restart negotiations to defuse the trade war, Bloomberg reported, citing sources.