With the announcement of Donald Trump’s $200 billion worth of tariffs on Chinese imports, the government in Beijing has immediately announced that they will be retaliating with tariffs of their own, likely to drive up the cost of everyday goods in both countries. Chinese President Xi Jinping has shown no signs of backing down to threats from the Trump administration, who has already said that any Chinese response in kind will be met with a higher border tax for all Chinese goods entering the United States, according to reports from the Washington Post.
In a statement released by the Chinese Ministry of Commerce, the government said, “In order to safeguard our legitimate rights and interests and the global free trade order, China will have to take countermeasures. We deeply regret this.”
The Chinese government had threatened in the past that they would respond with $60 billion worth of tariffs if Trump pushed on with his plans, placing higher taxes on virtually all of the United States’ exports to China.
Still, the Chinese government has yet to put forth an official policy in response. Chinese Foreign Ministry spokesman Geng Shuang was vague enough when asked about any details, saying, “We will release them in time.” Political analysts describe the Chinese reaction as an effort to match the bluster of the United States and develop their own position as a non-yielding superpower.
China says it will immediately retaliate when Trump tariffs take effect https://t.co/0C8u1Ulb5b
— Washington Post (@washingtonpost) September 18, 2018
“China needs to show that it will stand up to Trump and the United States in order to demonstrate to the rest of the world that it is now America’s rival,” Shaun Rein, a managing director at the China Market Research Group in Shanghai, told the Washington Post.
Worries are rising that Trump’s tariffs will launch a trade war between the world’s two largest economies, one that could be commercially destructive and drag on without an end in sight.
The Beijing government currently has a September 24 deadline for President Trump to roll back the tariffs and has made it clear in statements that it wants the American government to look toward reason and the American manufacturers that build their products in China. Specifically, air conditioners, furniture, lamps, and handbags will see a large jump in price due to the tariffs. Trump has already pledged to add another $267 billion of tariffs against China if they retaliate in any way.
Chinese consumption of American goods is much lower than American’s consumption of Chinese, with the $130 billion worth of American goods purchased by China being roughly one-third of the amount Americans spend. With the taxes and tariffs Beijing could potentially roll forward, about $110 billion of that spending would be subject to a higher tax.