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Trump's latest tariff threat draws retaliation warning from China

This article is more than 12 months old

Beijing vows to fight back with 'qualitative' and 'quantitative' measures

WASHINGTON/BEIJING US President Donald Trump threatened to impose a 10 per cent tariff on US$200 billion (S$270 billion) of Chinese goods, prompting a swift warning from Beijing of retaliation.

Mr 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 US$50 billion in US goods, which came after Mr Trump announced similar tariffs on Chinese goods last 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," he 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 yesterday.

China's Commerce Ministry said Beijing will fight back with "qualitative" and "quantitative" measures if the US publishes another 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.

"The US has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world."

US 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.

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"As China hawks, like Mr Lighthizer and (Mr Trump's trade adviser) Peter Navarro, appear to have gained power within the Trump administration lately, an all-out trade war now seems more inevitable," said Mr Yasunari Ueno, chief market analyst at Mizuho Securities in Japan.

Last Friday, Mr Trump said he was pushing ahead with a 25 per cent tariff on US$50 billion worth of Chinese products, prompting Beijing to respond in kind.

The White House is also expected to announce restrictions on investments by Chinese companies in the US by June 30.

- REUTERS

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