China to hike tariffs on 128 US products

Beijing, March 23

Don't be “penny wise and pound foolish” in pressing ahead with a trade war, China on Friday warned America as it unveiled plans to impose higher tariffs on 128 US products worth about $3 billion, while keeping “powder dry” by sparing big-ticket items for a future date.

The Commerce and Foreign Ministries on Friday unleashed a war of words to counter US President Donald Trump's moves to impose tariffs up to $60 billion on Chinese imports and limit the country's investment in the US in retaliation for years of alleged intellectual property theft.

US should “pause on the brink of a precipice” and make prudent decisions so as not to put bilateral trade relations in jeopardy, the Chinese Commerce Ministry warned.

China will not sit idly watching its legitimate rights and interests being damaged under any circumstance, a spokesperson of the Commerce Ministry said.

“We are fully prepared to firmly defend our interests," he said. Foreign Ministry spokesperson Hu Chunying breathed fire at a briefing saying Trump’s move is in total disregard to WTO rules amounted to “unilateral protectionist action”.

“Certain people from US obviously misjudged the situation and little bit arrogant and totally underestimated China's resolve and capability to protect its interests as well as the cost US has to pay for its reckless action,” she said replying to a volley of questions.

“We have made full preparations to protect our legitimate interests. China is not afraid to fight a trade war. We have the capability to address any challenges," she asserted.

Hua also justified China’s $375 billion trade surplus saying the Chinese products boosted consumer confidence in US and prevented inflations.

Trade war will harm consumer interest and financial market interests, she said, pointing out the big plunge in the stock market, which said is a “big vote of no confidence in US actions”.

"We hope US can take seriously China’s position and decide in rational manner. Don't be penny wise and pound foolish. That will harm US itself as well as others,” she warned.

Earlier, the commerce ministry said it was considering suspension of tariff concessions on 128 items of US products worth about $3 billion, a move aimed at countering the US decision to impose 25% tariffs on steel imports and 10% on aluminium, with initial exemptions for Canada and Mexico.

The measures, or the suspension of tariff concessions, will target 128 items of US products, including pork, wines and seamless steel tubes, it said.

According to the ministry, the measures will include a 15% tariff on products, including fruits, nuts, wines and seamless steel tubes, and a 25% tariff on pork and recycled aluminium products.

The measures will be implemented in two stages. In the first stage, the 15% tariff will be imposed if the two countries could not reach an agreement on trade issues within scheduled time. In the second stage, the 25% import tax will be imposed after evaluating the impact caused by the US policies, Xinhua news agency quoted the ministry as saying.

Trump had directed the US trade representative to level tariffs on about $50 billion worth of Chinese imports following a seven-month investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations.

“We have a tremendous intellectual property theft problem," Trump said. "It's going to make us a much stronger, much richer nation."

Before signing the measure, Trump lamented the US’ multi-hundred billion dollar trade deficit with China and said the action would be "the first of many."

The US also launched a complaint against China at the World Trade Organisation (WTO) on Friday. — PTI