Possible new US tariffs on Chinese goods not ‘cataclysmic:’ Ross
SINGAPORE/BEIJING: China yesterday urged the United States to “calm down” and return to reason after the Trump administration sought to ratchet up pressure for trade concessions by proposing a higher 25-percent tariff on $200 billion worth of Chinese imports.
US Trade Representative Robert Lighthizer said on Wednesday that President Donald Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet US demands and has imposed retaliatory tariffs on US goods. Trump’s threats of higher tariffs weighed on China’s financial markets. But Wang Yi, the Chinese government’s top diplomat, said US efforts to pressure China would be in vain, urging its trade policymakers to “calm down”.
“We hope that those directly involved in the United States’ trade policies can calm down, carefully listen to the voices of US consumers…and hear the collective call of the international community,” Wang, a member of the country’s state council, or cabinet, said in Singapore.
“The United States’ method of adding pressure will not, I’m afraid, have any effect,” he told reporters on the sidelines of a regional forum. Worsening trade tension between the two countries would not affect China’s stance on the denuclearization of the Korean peninsula, Wang said. “We deal with diplomatic matters on the basis of principle, not by engaging in trade.”
The Chinese yuan also ticked lower against the dollar, extending its year-to-date decline to more than 4.5 percent. There have been no formal talks between Washington and Beijing for weeks over Trump’s demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.
Foreign Ministry spokesman Geng Shuang reiterated at a regular news briefing in Beijing that the United States’ efforts at “blackmail” would fail. “We would advise the United States to correct its attitude and not try to engage in blackmail. This won’t work on China,” Geng said.
“Secondly, we would advise the US side to return to reason, and not blindly let emotions affect their decisions, because in the end this will harm themselves,” Geng said. Two Trump administration officials told reporters on a conference call that Trump remains open to communications with Beijing and that through informal conversations the two countries are discussing whether a “fruitful negotiation” is possible. The higher tariff rate, if adopted, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China’s retaliatory tariffs on an initial round of US tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.
China’s commerce ministry said the US tactics would have no effect on China, and would disappoint countries that are against trade wars. “China is fully prepared for the United States’ threats to escalate the two countries’ trade war and will have to fight back to defend its dignity and the interests of its people,” it said in a statement posted on its website.
Trump has ultimately threatened tariffs on more than $500 billion in Chinese goods, covering virtually all US imports from China. The USTR said it will extend a public comment period for the $200 billion list to Sept. 5 from Aug. 30 due to the possible tariff rate rise.
The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.
New tariffs that the United States is threatening to impose on nearly half the goods imported from China would have a small impact on the Asian nation’s economy and not lead to disaster, Commerce Secretary Wilbur Ross said yesterday.
“It’s not something that’s going to be cataclysmic,” he said in an interview with Fox Business News, explaining that a 25 percent tariff on $200 billion of goods would only amount to $50 billion a year, equal to less than 1 percent of China’s economy.
Ross said President Donald Trump “now feels that it’s potentially time to put more pressure on” China to “modify their behavior.” Trade Representative Robert Lighthizer said on Wednesday that Trump directed the increase from a previously proposed 10 percent duty because China had refused to meet US demands and had imposed retaliatory tariffs on US goods.
Trump’s threats of higher tariffs also weighed on China’s financial markets. But Wang Yi, the Chinese government’s top diplomat, said US efforts to pressure China would be in vain, urging its trade policymakers to “calm down.”
Meanwhile, world equities markets were in the red yesterday as trade war fears ratcheted higher after the United States said it was looking at more than doubling threatened tariffs on a range of Chinese imports.
In London, investors’ expectations were vindicated as the Bank of England hiked its key interest rate by a quarter-point to 0.75 percent. The British central bank’s nine-member monetary policy committee voted unanimously to raise rates for only the second time since the global financial crisis, but left unchanged its quantitative easing stimulus, just as most analysts had expected. More broadly, US and European markets followed in the footsteps of Asian trading floors, which sank after the US administration confirmed it was considering hiking levies to 25 percent from the announced 10 percent on $200 billion of Chinese goods. -Agencies