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China vows retaliation for $200-billion U.S. tariff threat

Shipping Containers on a cargo ship in Boston, USA - 10 Jul 2018
Shipping containers sit on the docks at the Conley Shipping Terminal in Boston, Massachusetts, on July 10.
(CJ Gunther / EPA/Shutterstock)

The Chinese government vowed Wednesday to take “firm and forceful measures” against U.S. threats to expand tariff hikes to thousands of products such as fish sticks, apples and French doors as their trade dispute escalates.

China gave no details but earlier threatened “comprehensive measures” if Washington took more action. That prompted fears Beijing, running out of imports for retaliation due to its lopsided trade balance with the U.S., might try to disrupt operations of American automakers, retailers and others that see China as a key market.

The spiraling conflict over Chinese technology policy threatens to chill global economic growth. It stems from Washington’s complaint that Beijing steals or pressures companies to hand over technology and worries that plans for state-led development of Chinese champions in robots and other fields might erode American industrial leadership.

A possible second round of tariff hikes announced Tuesday by the U.S. Trade Representative targets a $200-billion list of Chinese goods. That came four days after Washington added 25% duties on $34 billion worth of Chinese goods and Beijing responded by increasing taxes on the same amount of American imports.

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The abrupt escalation is “totally unacceptable,” said a Commerce Ministry statement. It said Beijing would take unspecified “necessary countermeasures” to protect its “core interests.”

Asked what Beijing would do, foreign ministry spokeswoman Hua Chunying gave no details but said, “We will take firm and forceful measures.”

The USTR said it was responding to Beijing’s decision to retaliate instead of changing its policies. President Trump has threatened higher tariffs on more than $500 billion of goods, or nearly all of China’s annual exports to the United States.

The USTR will accept public comments and hold hearings Aug. 20-23 before reaching a decision after Aug. 31, according to a senior U.S. official who briefed reporters on condition of anonymity.

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