WASHINGTON/BEIJING – U.S. President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods, prompting a swift warning from Beijing of retaliation, as the trade conflict between the world’s two biggest economies quickly escalated.
Trump’s latest move, as Washington fights trade battles on several fronts, was unexpectedly swift and sharp.
It was retaliation, he said, for China’s decision to raise tariffs on $50 billion in U.S. goods, which came after Trump announced similar tariffs on Chinese goods on Friday.
“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said in a statement on Monday.
The news sent global stock markets skidding and weakened both the dollar and the Chinese yuan in Asian trade on Tuesday.
China’s commerce ministry said Beijing will fight back firmly with “qualitative” and “quantitative” measures if the United States publishes an additional list of tariffs on Chinese goods, accusing Washington of launching a trade war.
“Such a practice of extreme pressure and blackmailing deviates from the consensus reached by both sides on multiple occasions,” the ministry said in a statement.
“The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the U.S., but of the world,” it said.
Washington and Beijing appeared increasingly headed toward open trade conflict after several rounds of talks failed to resolve U.S. complaints over Chinese industrial policies, lack of market access in China and a $375 billion U.S. trade deficit.
U.S. Trade Representative Robert Lighthizer said his office was preparing the proposed tariffs and they would undergo a similar legal process as previous ones, which were subject to a public comment period, a public hearing and some revisions. He did not say when the new target list would be unveiled.
“As China hawks, like Lighthizer and (Peter) Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable,” said Yasunari Ueno, chief market analyst at Mizuho Securities in Japan.