China vows to take 'necessary countermeasures' after United States tariff hike, stalling talks

The Administration has said tariffs on $200 billion in goods will increase from 10% to 25% just after midnight Friday if significant progress isn't made in trade talks, and analysts don't think Trump is bluffing. "China sets great store on trustworthiness and keeps its promises, and this has never changed", Chinese Ministry of Commerce spokesman Gao Feng (高峰) told reporters in Beijing yesterday.

Chinese Vice Premier Liu He leaves the Office of the United States Trade Representative in Washington, Thursday, May 9, 2019, during trade talks between the United States and China.

Tension between the United States and China has heightened after the White House accused Beijing of watering down commitments to trade reform - a claim strongly rejected by China.

"We hope the USA can meet China halfway, take care of each others' concerns and resolve existing problems through cooperation and consultations", Gao said.

Chinese shares, even more volatile, dropped sharply when the tariffs took effect but then recovered, with the Shanghai composite index last 1.9 percent higher.

"What the Chinese step-back primarily says is they don't want to publicly acknowledge that their existing laws, especially on IP, are flawed", he told AFP.

Economists and industry consultants have said it may take three or four months for American shoppers to feel the pinch from the tariff hike but retailers will have little choice but to raise prices on a wide range of goods to cover the rising cost of imports before too long, according to economists and industry consultants.

Chinese authorities already have extended retaliation beyond imports by targeting operations of American companies in China.

President Trump has said he will increase the amount of tariffs on Chinese goods starting early Friday.

By sea, goods sent from China take about three weeks to cross the Pacific.

"Mentally and materially, China is much better prepared than its US counterpart", the newspaper said.

Trump, speaking at an event in Washington, said he may hold a phone call with his Chinese counterpart Xi Jinping.

"We should not hurt innocent people", Liu told CCTV.

While the United States wants to reduce the scale of its trade deficit with China, it is also seeking stronger protection for American intellectual property and more market access in China for USA companies.

This week's setback was unexpected.

Though most economists say such a broadening of the trade conflict would inflict serious damage on both economies, the president insists his tariffs helped the United States economy grow at a 3.2 per cent annual rate in the first quarter. They wouldn't identify the specific issues involved.

In fact, back in April, the Global Times, a hawkish newspaper published under People's Daily that focuses on worldwide issues, provided detailed explanations of "Why China Should Never Make Any Concessions in the China-U.S". The bargaining chips at both parties' hands have not changed much and China's strategy has always been guarding the bottom line.

While Chinese economic indicators can be less reliable than those in the US, the country's economic growth slowed to the lowest level in almost three decades a year ago, and some analysts believe the country could be facing an impending debt crisis that the country's leaders would want to avoid at all costs.

The men were detained in apparent retaliation after Canada arrested an executive of Chinese tech giant Huawei on USA charges of bank fraud.

  • Zachary Reyes