China accuses US of “blackmail” over latest tariff threat

US President Donald Trump has threatened to impose a new 10 per cent tariff on up to US$200bn of Chinese goods, in the latest escalation of tensions between the world’s two largest economies.

Last week, the US announced tariffs on US$50bn of Chinese imports, prompting China to vow reciprocal duties on 659 US products, the BBC reports.

However, that response seems to have irked President Trump, who said on Monday that new duties will be imposed if China “refuses to change its practices and also if it goes ahead with the new tariffs that it has recently announced,” Reuters reports.

It is often said that no one wins in a trade war. But by taking such an aggressive course, President Trump might be hoping to win a war before it has even started. According to Economist journalist Simon Rabinovitch, there is a rational to the mooted figure of US$200bn. He tweeted: “Trump’s latest threat on tariffs on $200bn of Chinese goods is not a random number. It would, in a narrow sense, put tit-for-tat retaliation out of reach for China: it bought only $170bn of US goods and services last year.”

However, if the US calculates that its economic clout might overwhelm and subdue Beijing, and prevent reciprocal duties and hence an escalating trade war, the tactic does not seem to be working – at least not publicly. According to Economic Times, the Chinese Commerce Ministry issued a robust statement in response to the latest threat of tariffs, saying it will target US products with measures of “quality” as well as “quantity.”

“This practice of extreme pressure and blackmail deviates from the consensus reached by two parties through many negotiations, and it also disappointed the international community,” the statement said.

“If the US side becomes irrational and issues the list, China will have to adopt measures that are comprehensive measures in quantity and quality in order to make strong countermeasures.”