BEIJING (BLOOMBERG, REUTERS) - The US will pay a price if it continues to stoke a trade war, according to an editorial in the English edition of China's Global Times, a nationalist newspaper affiliated with the People's Daily.
While US President Donald Trump has "lost the sober ability to make strategic decisions", tariffs announced this week on imported solar panels and washing machines are probably "merely a practice run", the newspaper said.
Trump needs to know that China will react with appropriate measures, it said.
"China should not allow the US to get away without paying a price for making unreasonable demands," the article said.
The newspaper cited China's ability to sell US Treasuries as a means to respond to more aggressive protectionist measures, as well as restrictions on imports on agricultural products, machinery and aircraft.
China Daily, the nation's flagship English-language newspaper, reported that countries facing trade restrictions including China will retaliate in opaque ways, citing Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.
"Tit-for-tat is now the name of the game," he said.
On Tuesday, China's commerce ministry branded the move an “overreaction” that would harm the global trade environment for affected products.
“The US’ decision ... is an abuse of trade remedy measures, and China expresses strong dissatisfaction regarding this,” Wang Hejun, the head of the commerce ministry’s Trade Remedy and Investigation Bureau, said in a statement on its microblog.
“China will work with other (World Trade Organisation) WTO members to resolutely defend its legitimate interests in response to the erroneous US decision.”
Washington said it will impose a 20 per cent tariff on the first 1.2 million imported large residential washers in the first year, and a 50 per cent tariff on additional imports. The tariffs fall to 16 per cent, and 40 per cent, respectively, in the third year.
A 30 per cent tariff will be imposed on imported solar cells and modules in the first year, declining to 15 percent by the fourth year. The measure allows 2.5 gigawatts of unassembled solar cells to be imported tariff-free in each year.