China’s Commerce Ministry warned on Thursday that new American tariffs amount to the United States “opening fire on the entire world, including itself” in a trade war.
“U.S. measures are essentially attacking global supply and value chains. To put it simply, the U.S. is opening fire on the entire world, including itself,” Commerce Ministry spokesman Gao Feng said.
“China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system,” he added.
Reuters reviews the measures due to take effect on Friday:
U.S. Customs and Border Protection officials are due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.
The list avoids direct tariffs on consumer goods such as cellphones and footwear. But some products, including thermostats, are lumped into intermediate and capital goods categories.
China has threatened to respond with tariffs on hundreds of U.S. goods, including top exports such as soybeans, sorghum and cotton, threatening U.S farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa.
“An American chemical company has been rushing its shipments to China to beat the clock. A Beijing steakhouse has dropped U.S. beef from its menu. And China has been shifting soybean purchases to Brazil, from which it bought nearly 30% more beans in May than it had a year earlier, according to research firm CEIC,” the Wall Street Journal adds, noting that Chinese importers have “mostly stopped buying U.S. soybeans.”
Bloomberg News reported on Wednesday there was “little sign of a last-minute deal” to avert tariffs on $34 billion in Chinese goods, making investors nervous about a crossfire of retaliatory measures between the U.S. and China. If the dispute escalates as predicted, it could ultimately affect half a trillion dollars in Chinese products, combined with a presumably comparable value of American goods sanctioned by China.
“The dispute is expected to ripple through global supply chains, raise costs for businesses and consumers and roil global stock markets, which have been volatile in anticipation of a prolonged trade fight between the United States and almost everyone else,” the New York Times wrote on Thursday.
The Times quoted Syracuse University economics professor Mary Lovely explaining that “non-Chinese multinational corporations operating in China will often pay a larger share of the tariffs than Chinese firms,” which would add punch to China’s accusation of the Trump administration “opening fire on the world.”
“The Trump administration designed its tariff list to try to spare consumers, and many of the products that American families purchase from China, from flat-screen TVs to shoes, will not be hit on Friday. But in the process, the tariffs instead focus heavily on the kind of intermediate inputs and capital equipment that businesses purchase. Economists say that will raise costs for American industry, potentially threatening the manufacturing jobs that Mr. Trump has long said he wants to protect,” the NYT added.
The Wall Street Journal notes that foreign companies such as Germany’s Daimler AG and BMW AG are being drawn into the trade dispute because they sell American-made vehicles in China. Meanwhile, tariffs on American vehicles will give competitors like Toyota a competitive advantage in China.
Representatives from several major automakers told the WSJ they felt obliged to eat the cost of the tariffs themselves and keep their prices in China the same, a policy that would be difficult for them to sustain indefinitely.