- President Donald Trump on Friday announced tariffs on $US50 billion worth of Chinese goods.
- China’s Ministry of Commerce said the country would respond with equal tariffs on US goods.
- The Chinese government also urged Trump not to start a trade war.
- “We call on all countries to take joint action, resolutely put an end to this outdated and regressive behaviour, and firmly defend the common interests of mankind,” the Chinese government said in a statement.
The country’s Commerce Ministry said China would apply tariffs on US goods at the “same scale and the same strength.” Its statement also said all trade agreements made between the two countries during recent negotiations would be void because of the new US tariffs.
China’s government urged the US to back down from its latest course of action, which would start rolling out the tariffs in early July.
“China does not want to fight a trade war,” the Commerce Ministry said. “However, in the face of short-sighted behaviour that the United States has done against people’s disadvantages, the Chinese side has to give a strong blow back, resolutely safeguard national interests and the interests of the people, and resolutely defend economic globalization and the multilateral trading system.”
The back-and-forth set off a wave of worry among trade experts, economists, and investors. Following Trump’s announcement, the Dow Jones industrial average nosedived almost 230 points, or 0.91%, as of 10:55 a.m. ET. The S&P 500 was off by about 0.65%, and the tech-heavy Nasdaq composite was down 0.33%.
The tariffs are the latest chapter in the ongoing trade conflict between the two countries. Trump in March first announced plans to impose tariffs on Chinese goods as punishment for theft of US intellectual property by China.
A series of negotiations appeared to make headway toward a deal to avoid the conflict, but ultimately Trump decided to move ahead with the crackdown, at least temporarily scuttling any hope of an agreement.
The Chinese tariffs of 25% will hit 659 goods worth a total of $US50 billion according to Chinese news agency Xinhua. The first set of tariffs, worth $US34 billion, will go into effect on July 6 and focuses on agricultural goods and cars. The rest of the tariff will be announced later.
The two tariff set is nearly identical to the US’s dual-phased tariffs.
China also appealed to other countries to pressure the US to end recent protectionist trade policies. Trump recently hit US allies including the European Union, Canada, and Mexico with tariffs on steel and aluminium imports that have already taken effect.
“In today’s era, launching a trade war is not in the global interest,” China’s Commerce Ministry said. “We call on all countries to take joint action, resolutely put an end to this outdated and regressive behaviour, and firmly defend the common interests of mankind.”
Geopolitical analysts have warned that Trump’s trade attacks on US allies could isolate the US and help China realise its goal of becoming the dominant player in international relations.