Beijing responds forcefully to Trump's escalating threats, raising risks of all-out trade war
Chinese Ministry of Commerce spokesman Gao Feng, during a press conference Friday in Beijing, said China would fight the U.S. “at any cost” after President Trump proposed additional tariffs on $100 billion of Chinese goods. (Andy Wong / AP)


President Trump’s latest threat to ratchet up tariffs on Chinese imports was met with a forceful response from Beijing on Friday as escalating trade tensions between the two largest economies once again unnerved financial markets and increased concerns about the prospect of a full-blown trade war.

After Trump ordered his administration to consider slapping taxes on an additional $100 billion in Chinese goods on top of $50 billion in goods previously announced, China’s Commerce Ministry vowed to fight the new tariffs “at any cost” with a full slate of counter-measures.

Chinese officials did not provide specifics, but Beijing could take a host of actions to make life difficult for American businesses operating in China, in addition to levying tariffs on more U.S. imports to China.

Earlier this week, China quickly responded to the Trump administration’s tally of $50 billion in Chinese products that would face 25% tariffs with its own list of American-made goods, including cars, aircraft and soybeans, that would be subject to import taxes of a similar amount.

Trump, apparently angered by Beijing’s tit-for-tat response, upped the ante Thursday evening, saying that instead of correcting its practice of unfairly appropriating American intellectual property, “China has chosen to harm our farmers and manufacturers.”

“China’s illicit trade practices − ignored for years by Washington − have destroyed thousands of American factories and millions of American jobs,” Trump said in a statement.

Trump’s top economic advisor said on Friday that China’s response to the initial U.S. tariff move was “highly unsatisfactory.”

“The problem here is China, not Trump,” Larry Kudlow, director of the White House National Economic Council, told reporters at the White House.

Kudlow complained of what he called decades of “illegal practices” by China that violate World Trade Organization rules. “They’re a first-world country now and they have to act like a first-world country and they have to play by the rules,” Kudlow said.

Trump, however, kept open the possibility of negotiations. And U.S. Trade Representative Robert Lighthizer, while saying the president’s proposal is “an appropriate response,” made clear that any additional tariffs, like the earlier ones announced, would not take effect immediately. The tariffs would first be subject to a 60-day public comment and hearing period.

Even so, the intensifying rhetoric and threats from both sides have shaken stock markets in recent days and left many wondering how much worse things will get. The Dow Jones industrial average plunged more than 700 points, or 3% Friday, and many businesses are bracing for the standoff to last for some time.

“As both China and the U.S. try to gain concessions from each other in the ongoing trade talks, the back-and-forth between the two countries on tariff threats is not likely to end soon,” said the Fung Group, a Hong Kong-based firm involved in trading, logistics and retailing.

“However, while the tariff threats seemed to raise the chances of an all-out trade war,” Fung said in a report, “both sides have left room for negotiations.”

Kudlow sought to calm jitters by stressing that the U.S. is still months away from enacting the tariffs against China and that there were “all kinds of back-channel discussions going on” between the two nations.

“We’re not in a trade war,” Kudlow said. “What this is is an attempt by a strong-willed and strong back-boned president to right some wrongs with respect to China.”

But Kudlow said that “Trump is not just using tariffs as a negotiating card” and is prepared to use them. “I don’t like to use tariffs but sometimes you have to use tariffs to bring countries to their senses,” Kudlow said.

GOP lawmakers, who traditionally have favored free trade, voiced concerns about Trump’s latest action. “Hopefully the president is just blowing off steam again, but if he’s even half-serious, this is nuts,” said Sen. Ben Sasse (R-Neb.). “He’s threatening to light American agriculture on fire. Let’s absolutely take on Chinese bad behavior, but with a plan that punishes them instead of us. This is the dumbest possible way to do this.”

But House Ways and Means Committee Chairman Kevin Brady (R-Texas), called for both sides to resolve their differences in talks. “The deliberation period announced by the president gives the U.S. and China a long overdue opportunity to resolve this serious trade dispute,” he said in a statement. “It is in both of our countries’ interest — and frankly, the world’s — to find a new path forward on unfair trade practices.”


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