China warns US on higher tariff report

Foreign Ministry spokesman: Countermeasures would follow

China will inevitably take countermeasures if the United States further hinders bilateral trade, the Ministry of Foreign Affairs said on Wednesday in response to Western news reports saying that Washington would more than double a set of earlier proposed levies on Chinese goods.

The reports say a 25 percent tariff — instead of the original 10 percent — would be proposed on $200 billion of Chinese goods by the administration of US President Donald Trump. Reports cited unnamed sources familiar with the plan, which could be announced as early as Wednesday in Washington.

US pressure and blackmail on trade won't work. If the US takes further steps to escalate trade frictions, China will inevitably come up with countermeasures to resolutely protect its legitimate rights, Foreign Ministry spokesman Geng Shuang said at a news conference.

Geng said China had "always upheld using dialogue and consultations to handle trade frictions", but talks must be based on equality and mutual respect.

On July 10, the US announced a second possible round of tariff increases of 10 percent targeting $200 billion worth of Chinese imports, goods ranging from steel and aluminum products to cat food and baseball gloves.

The Office of the US Trade Representative set a deadline for final public comments on the earlier proposed 10 percent tariffs to be filed by Aug 30, after public hearings scheduled for Aug 20 to 23.

Sheng Liugang, an assistant professor of economics at the Chinese University of Hong Kong, said about 22 percent of goods subject to the additional tariff are consumer products, so levies would have a greater direct effect on US citizens.

"It violates the promises of the administration of US President Donald Trump that a trade war with China will not damage (the nation's) own people," he told ftchinese.com.

The US is highly dependent on imports from China, especially consumer goods and industrial parts, said Liang Ming, director of the foreign trade research center at the Chinese Academy of International Trade and Economic Cooperation, affiliated with the Ministry of Commerce.

Among the 6,031 items on the most recent $200 billion list are 67 items on which the US depends wholly on Chinese imports, the center said.

The US is dependent 90 to 100 percent on Chinese imports for 127 items.

For 193 items, there is 80 to 90 percent dependence. For 207 items, there is 70 to 80 percent dependence, and for 1,150 items, there is a greater than 50 percent dependence, center officials said.

"The additional tariff on the intermediate products from China means it will cost more to produce goods for US manufacturers, and eventually it will be US consumers who pay the bill," he said.

Wu Dongxu, general manager of the Foreign Investment Department at Beijing-based Transcontinental Management Consultancy, urged experts to analyze the Trump administration's tariff threats in a more political light.

He stressed while it is economically irrational for Trump to wage a trade war, it might be politically rational to do so. Negotiations between the two nations would be long and bumpy, he warned. Wu called the US argument that China's State-owned enterprises are government-directed and not market-led "ironic".

"When they complain about 'intellectual property theft', they are talking about deals struck between private American companies acting in their own best interest," Wu said.