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China will "fight back firmly" if the United States publishes an additional list of tariffs on Chinese goods, the Ministry of Commerce said on Tuesday morning.
The Trump administration threatened to slap a 10 percent tariff on $200 billion in Chinese imports on Monday, a weekend apart from announcing hefty tariffs on made-in-China products, escalating a trade dispute that has put markets and businesses on edge.
"This practice of maximum pressure and blackmail goes against the consensus reached by the two sides on multiple occasions, and has utterly disappointed the international community," the ministry said in a statement on its website.
If the US side gets so irrational as to publish an additional list of tariffs on Chinese goods, China will have to fight back firmly with comprehensive "qualitative" and "quantitative" measures, it said.
On Monday, US President Donald Trump said he had asked the US trade representative to identify the Chinese products to be subject to the new tariffs, a move that he said would be in retaliation for China"s decision on Saturday to raise tariffs on $50 billion in US goods, according to a White House release.
"After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced," Trump said.
He further threatened that he would pursue "additional tariffs on another $200 billion of goods" if China responds to the fresh round of tariffs.
The Trump administration on Friday announced a 25 percent tariff on up to $50 billion in Chinese imports, prompting China to retaliate swiftly with matching duties on American imported goods.
Wall Street has viewed the rising trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump"s watch, The Associated Press reported on Monday.
At a Washington Post panel last week, Gary Cohn, Trump"s former top economic adviser, took aim at the president"s announced tariffs on steel, aluminum, and some Chinese goods, saying they could wipe out the positive boost from the tax law Trump signed in December, according to a Business Insider report.
"If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt," he said. "Those are all historic ingredients for an economic slowdown."
As the trade deficit is at the core of bilateral trade relations, Zhang Zhiwei, chief China economist at Deutsche Bank, said US companies actually may have sold more to China than Chinese firms did to the US.
The bilateral trade balance may be misleading because it does not capture the sales of goods and services by foreign firms" local subsidiaries, Zhang said. Countries such as Japan and South Korea have large businesses in China that export to the US.
Combining trade and foreign direct investment, the US actually ran a surplus against China. Deutsche Bank estimated that the US aggregate sales balance had turned into a surplus against China in 2016 and 2017.
The aggregate US sales balance with China increased to a $7 billion surplus in 2016 from a $30 billion deficit in 2015, and further increased to a $20 billion in surplus in 2017. This is because sales of major companies" local subsidiaries in China continue to grow more rapidly than the growth of the trade deficit in the past few years, according to the research.
"Escalation of the trade war between the US and its major trading partners would be negative for US multinationals and the US labor market," said Zhang. "China"s rising demand for US products, such as food and energy, may also help some US regions that were previously negatively affected by globalization."
Zhang said a trade war may put US multinationals in danger, because multinationals accounted for one-fifth of total employment in the US.
Karen Reddington, president for Asia-Pacific at Memphis, Tennessee-based logistics company FedEx Corp, said the company remains committed to lowering trade barriers for its customers. She contended that imposing tariffs would slow economic growth and raise prices for its businesses and consumers.
Long Guoqiang, vice-president of the Development Research Center of the State Council, said that in terms of the production value chain, the US manufacturing sector not only accounts for the most profitable industries, but also is enjoying the highest added value and is actively allocating low-value-added segments overseas.
Ford Motor Co sold 338,386 vehicles in China in the first five months of this year, about one-third the number in the US, and had welcomed a Chinese plan to reduce tariffs on auto imports.
That may be in jeopardy as gas-powered and electric vehicles could face the border tax increase.
"President Trump is fixated with tariffs, which he believes he can wield freely, but there are grave consequences," said American Apparel & Footwear Association President Rick Helfenbein. "Congress needs to step in now to end this dangerous obsession."
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