China vows to counter latest US tariffs while Trump says any deal would have to be on ‘our terms’

China says it hopes US will meet it halfway, but Trump has other plans

Thursday 15 August 2019 18:06 BST
US-China trade talks broke down in May over how to enforce a deal.
US-China trade talks broke down in May over how to enforce a deal. (AP)

China has threatened to retaliate against the latest US tariffs on $300bn (£248bn) of Chinese imports but called for a compromise in order to reach a trade deal, while Donald Trump said any agreement would have to be on American terms.

Beijing will take unspecified “necessary countermeasures”, the finance ministry said on Thursday. It gave no details or any indication that plans for trade talks in Washington in September might be affected.

A separate statement from a spokesperson for China’s foreign ministry struck a more conciliatory tone.

“We hope the US will meet China halfway,” she said.

China hopes to find mutually acceptable solutions through dialogue and consultation on the basis of equality and mutual respect, she added.

That stands in contrast to Mr Trump’s stance, according to his comments broadcast later on Thursday.

“China, frankly, would love to make a deal and it’s got to be a deal on proper terms. It’s got to be a deal, frankly, on our terms,” he said in an interview on US radio station WGIR.

The mounting tension between the world’s two largest economies has unnerved financial markets, fuelling worries that the global economy will tip into recession.

Mr Trump has announced 10 per cent duties on the additional $300bn of Chinese imports, extending penalties to almost everything the US buys from China.

The statement from the Chinese finance ministry made no mention of Mr Trump’s decision on Wednesday to postpone tariffs on about 60 per cent of those goods until mid-December. Among the products given a reprieve are mobile phones, laptops, video game consoles, some toys, computer monitors, shoes and clothing.

Trade between the US and China has plunged, battering suppliers of goods from medical equipment to soybeans and threatening job losses. Chinese imports of US goods fell 19 per cent in July compared with a year earlier and exports to the US declined 6.5 per cent.

China’s lopsided trade balance with the US means Beijing almost has almost run out of American imports that it hasn’t already hit with retaliatory tariffs. But Beijing has extended punishment for US companies by delaying customs clearance for their goods and delaying issuing licences in finance and other sectors.

The trade talks broke down in May over how to enforce a deal. Beijing says Mr Trump’s tariffs must be lifted as soon as an agreement takes effect but Washington says they must stay to enforce compliance.

Mr Trump and President Xi Jinping agreed in June to resume negotiations. A round of talks last month in Shanghai ended with no indication of progress.

By this point, the Trump administration has imposed 25 per cent tariffs on $250bn of Chinese imports.

Beijing has retaliated by imposing punitive duties on $110bn of American goods. Based on last year’s imports of US goods, that leaves about $45bn of goods that haven’t been hit with penalties.

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