Beijing says it remains undaunted by a trade war after US President Donald Trump threatened last Friday to dramatically hike current tariff rates on Chinese imports, according to multiple media outlets.
“China’s stance is consistent,” the Commerce Ministry said in a statement. “We do not want a tariff war but we are not afraid of one.”
The two countries had been in a tentative truce since the Madrid trade talks in September, and their respective presidents were expected to meet in South Korea later this month. However, new export controls on rare earths issued by Beijing last week sparked outrage in Washington – with Trump describing the move as “very, very bad” on social media.
He went on to say he would “impose a tariff of 100 percent on China, over and above any tariff that they are currently paying” starting 1 November. That would bring the total rate for most Chinese imports up to about 140 percent.
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He also said that other countermeasures including export controls on “critical software” were “under serious consideration” and implied his upcoming meeting with President Xi Jinping was unlikely to happen.
Beijing has defended the tightening of its rare earth controls as a “legitimate” measure under international law that would “better safeguard world peace and regional stability.”
A Commerce Ministry spokesperson has denied the controls were “bans”, as applicants meeting its requirements to export would be approved. “China has fully assessed the potential impact of these measures on the supply chain and is confident that the impact will be very limited,” they added.
Trump’s post shocked the US stock market, with Bespoke Investment Group estimating about US$2 trillion in value was wiped in its aftermath.
