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Trade war fears ramped up again as China vows to retaliate against ‘unacceptable’ new US tariffs

Washington unveiled a new list of tariffs in response to Beijing’s retaliation over the imposition of US charges last week

Caitlin Morrison
Wednesday 11 July 2018 12:00 BST

China has vowed to protect its interests and blasted the latest round of tariffs threatened by the US government, describing them as “totally unacceptable”.

On Tuesday, the US trade representative’s office unveiled a $200bn (£151bn) list of Chinese goods earmarked for a 10 per cent levy, including, fish, carrots and nuts.

“It is totally unacceptable for American side to publish a tariff list in a way that is accelerating and escalating,” China’s commerce ministry said.

“To protect the core interests of the nation and its people, the Chinese government will be forced to impose necessary countermeasures.”

Washington said the new list was a response to Beijing’s retaliation over the imposition of US tariffs last week.

On Friday, a 25 per cent charge on a variety of goods worth a total of $34bn, including electronics and medical equipment, took effect.

China responded by imposing similar levies on US imports such as soybeans and orange juice.

Robert Lighthizer, the US trade representative, said China had acted “without any international legal basis or justification” when it enacted the retaliatory tariffs, and said the US had made an “appropriate response… to obtain the elimination of China’s harmful industrial policies”.

“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake,” Mr Lighthizer said.

“Unfortunately, China has not changed its behaviour – behaviour that puts the future of the US economy at risk. Rather than address our legitimate concerns, China has begun to retaliate against US products. There is no justification for such action.

“As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China’s unfair trade practices and to China opening its market to US goods and services. In the meantime, we will remain vigilant in defending the ability of our workers and businesses to compete on a fair and reciprocal basis.”

The escalation of trade war fears pulled markets down around the world on Wednesday, with the FTSE 100 falling more than 1 per cent, and US markets are also expected to open lower.

Lukman Otunuga, a research analyst at FXTM, said: “With Beijing describing the latest tariff threats as ‘totally unacceptable’ and vowing to fight back, concerns are likely to heighten over a full-scale trade war becoming a reality.

“With escalating trade tensions between the world’s two largest economies presenting a significant threat to global economic growth and stability, there are no winners. Investors are likely to maintain a cautious stance for the rest of the trading week with global sentiment expected to remain fragile.”

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