On August 8th, Beijing warned that it was prepared to impose retaliatory tariffs on $16 billion worth of US goods.
These tariffs are aimed at matching the finalized list of tariffs the US Trade Representative office published on August 7th. The new tariffs will go into effect on $16 billion in Chinese goods on Aug. 23. These are in addition to the tariffs imposed on $34 billion on July 6th. This fulfills Donald Trump’s promise to impose a 25% tariff on $50 billion in Chinese goods.
On July 6th, in retaliation to US tariffs, China imposed a 25% tariff on $34 billion in US goods. This leaves both country at an equal $50 billion in tariffs.
On August 3rd, China threatened to impose $60 billion in tariffs on US goods, however no timeline was provided for the introduction of the supposed tariffs. One of the goods on the $60 billion list is Liquefied Natural Gas (LNG). Hugo Brennan, senior Asia analyst at consultancy Verisk Maplecroft warns that a tariff on LNG would create shifts in the global energy market. The US is the world’s leading producer of natural gas and is a growing major exporter of LNG. If the tariff on LNG is imposed, it “would deal a serious blow to the U.S. gas industry and President (Donald) Trump’s ‘energy dominance’ agenda,” said Brennan.
In a response to the US new row of tariffs, China condemned Washington’s “stick of hegemony” in the intensifying trade war. The US has also threatened to impose a 10% tariff on $200 billion worth of Chinese goods, with Trump threatening to increase that amount to $500 billion.
On August 9th, Chinese state media accused the US of a “mobster mentality” in its move to implement additional tariffs. It also further warned that Beijing possesses all means to retaliate.
“The two countries’ trade conflict, which is merely push and shove at the moment, is likely to escalate into more than just a scuffle if the U.S. administration cannot marshal its mobster mentality,” state newspaper China Daily, was cited by Business Insider. “China continues to do its utmost to avoid a trade war, but in the face of the U.S.’s ever greater demand for protection money, China has no choice but to fight back,” the newspaper further commented.
Business Insider also cited Jia Xiudong, a research fellow in the China Institute of International Studies, who in a publication in the People’s Daily newspaper, said the US was trying to “suppress China’s development.”
The Global Times newspaper, published by Communist Party’s People’s Daily, said in a commentary that China should consider “unconventional methods.” One such unconventional method would be the stimulus plan used by Beijing during the 2008 global financial crisis to sustain economic growth.
Xinhua, as cited by South China Morning Post, released a long commentary, which according to the publication is a “declaration,” a likely “a reflection of thinking from the top echelons of the ruling Communist Party.”
“Unwilling to see the lion awaken and the dragon in flight, or to witness 1.3 billion people lead happy lives, some people have taken the approach of unilateralism, protectionism, and trade bullying. These are challenges that cannot be avoided, and must be dealt with,” was what the commentary by Xinhua said.
“Certain people are selfishly moving against the tide of morality, wantonly building up trade barriers and wielding the stick of hegemony. Although they may be pleased with themselves for now, they can hardly resolve the deep disputes of economic imbalance and political disorder, they will eventually shoot themselves in the foot,” continued the comment.
There has been no comment by Chinese President Xi Jinping and other top leaders, because they are at a summer gathering of the elite at Beidahe.