China has announced fresh retaliatory measures in the ongoing trade war with the United States as it accused Washington of lying repeatedly about the effects tariffs have had on the Chinese economy.
Increased tariffs of 5 per cent to 25 per cent on US$60 billion (S$83 billion) of imported US goods take effect today, in a tit-for-tat move after US President Donald Trump more than doubled punitive tariffs on US$200 billion of Chinese goods following failed trade talks last month.
China's Commerce Ministry yesterday said it will draw up an "unreliable entities list" targeting foreign firms that violate market rules or impose blockades for non-commercial reasons, opening the door for Beijing to hit back against US technology firms - such as Qualcomm - that Washington has barred from dealing with Chinese telecommunications firm Huawei.
Chinese Foreign Ministry spokesman Geng Shuang yesterday slammed Mr Trump's remarks that US tariffs have had a "devastating effect" on the Chinese economy.
Mr Trump on Thursday claimed the tariffs have had little impact on US taxpayers as China has been footing much of the bill, despite experts saying that US consumers and importers bear the brunt of tariffs on Chinese imports.
"China would love to make a deal with us... the tariffs are having a devastating effect on China (and) people are fleeing the country with their companies," Mr Trump had said. He also said China was "becoming a very weakened country" and compared it with Iran.
Mr Geng said the US has repeated these "lies and fallacies" on multiple occasions.
"Every time China exposes them in time, but the US seems to be very persistent, even obsessed, and keeps repeating these lies," he said at a regular press briefing. "I would like to warn the American side not to overestimate its own rumour-making ability, or underestimate the judgment of others."
I would like to warn the American side not to overestimate its own rumour-making ability, or underestimate the judgment of others.
CHINESE FOREIGN MINISTRY SPOKESMAN GENG SHUANG
The latest exchange caps a week marked by a war of words and Chinese threats to curb exports of rare earths, which are crucial for high-tech manufacturing.
Senior Chinese academics and officials yesterday said the US would come to rue its decision to fight a trade war with China.
At a seminar on US-China trade relations, former vice-commerce minister Wei Jianguo said it might be the US' biggest strategic mistake since World War II, or even its founding.
The US has chosen this path because "it is not willing to accept China as a rising great power, a country on an equal footing with itself", he said.
While a meeting between Mr Trump and Chinese President Xi Jinping has reportedly been planned when they are in Osaka to attend the Group of 20 summit later this month, former People's Bank of China head Dai Xianglong said he could not see the two leaders making a major breakthrough in ending the trade war.
Mr Dai said he does not rule out further retaliatory moves by China, although a sell-off of US Treasuries or a currency devaluation was unlikely as these would hurt China's interests.
Two heads of industry chambers presented data to show that US companies and consumers were the ones on the losing end of the trade war so far, though Chinese manufacturing activity contracted more than expected last month.
Mr Cao Derong, president of the China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal By-Products, said the price of walnuts, for instance, has fallen by half since the trade war began, while US soya bean revenues have regressed to 2008 levels.
China this week reportedly halted all new orders of US soya beans due to the trade disagreement.
Mr Dong Yang, a former executive director at the China Association of Automotive Manufacturers, said at the seminar that US auto parts suppliers will also be hard hit if the trade war continues and that competitors from Germany, Japan, South Korea and France can provide strong substitutes to serve the Chinese market.
Agreeing, Mr Cao said that while retaliatory tariffs meant that consumers face some pain from higher prices of US nuts and dried fruits, Chinese importers are already looking at alternatives from other countries.
A majority of US goods subject to the increased tariffs, which were announced two weeks ago, are consumer goods like cosmetics, liquor, appliances and food products.
Mr Cao said: "In an environment of trade friction, this is a decision that companies undertake on their own, with no intervention from the government."