State media says China's response to latest U.S. tariffs restrained, rational

Marco Green
August 7, 2018

In terms of Trump's claim that money raised from the tariffs will help pay down the debt, the United States has a debt of over $21 trillion. "At minimum, we will make much better Trade Deals for our country!" he added.

A piece in the Global Times, a tabloid run by the People's Daily, described the retaliatory measures as "rational" and insisted China "will not rush to compete with USA numbers".

President Donald Trump this week ordered officials to consider imposing a 25 per cent tax on US$200 billion worth of imported Chinese goods, up from an initial 10 per cent rate. Last month, the International Monetary Fund warned that escalating trade conflicts following USA tariff actions on its trading partners threaten to derail the global economic recovery. Neither side is showing any sign of backing down.

Wang also hit back at comments by top White House economic advisor Larry Kudlow, who ridiculed China's tariff threat as "weak" and said the world's second-largest economy was in significant "trouble". The move was meant to bring China back to the negotiating table for talks over USA demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit, but China's response suggests that tactic hasn't worked.

And while America's trade deficit with Europe shrank in June, it grew with both Canada and China. But. the Chinese Party and the government control the media as well as a good bit of the economy.

"The implementation date of the taxation measures will be subject to the actions of the United States, and China reserves the right to continue to introduce other countermeasures", the Chinese government press release stated.

President Donald Trump tweeted Sunday morning that his tariffs are "working big time" and made a freaky claim that the money raised from these new import taxes will go a long way to helping pay down America's large debt.

"We have really rebuilt China, and it's time that we rebuild our own country now", Trump said Saturday during about an hour of free-wheeling remarks at a rally outside Columbus, Ohio.

"Tariffs are working big time". The Trump administration is weighing an additional round of tariffs on $200 billion of Chinese goods.

Michael McCarthy, Sydney-based chief market strategist at CMC Markets and Stockbroking, wrote in a note to clients that while China's proposed new tariffs appeared proportionate, "White House tweets claiming an upper hand for the USA over the weekend risk another round of confidence sapping exchanges".

More from Bloomberg.com: U.S. Because US farmers are now experiencing the phenomenon of having a surplus of goods that they can not sell on the Chinese market due to the retaliatory tariffs already in place, the American federal government will now likely have to bail farmers out due to the losses of revenue they have incurred simply because they are being artificially isolated from the Chinese market that represents a lion's share of their profits.

The White House initially announced tariffs - 25 percent on steel and 10 percent on aluminum - arguing they would protect US companies and allow for the creation of new manufacturing plants - key Trump promises in the 2016 presidential campaign.

Leaders of the European Union have agreed to begin negotiations with the White House that would include buying more soybeans and energy products in exchange for discussions that could lead to a suspension of steel and aluminum tariffs, but those talks have only just begun and the parameters are unclear. That particular set of tariffs has not yet taken effect.

"Virtually nothing has happened in a trade dialogue with China in a month or six weeks", Kudlow said.

Other reports by Click Lancashire

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