U.S. Has Launched ‘Largest Trade War in Economic History,’ China Says
China accused the U.S. of launching “the largest trade war in economic history,” forcing China to counterattack.
In a statement issued minutes after the U.S.’s Friday deadline for imposing 25% tariffs on $34 billion in Chinese products, China’s Commerce Ministry said that Beijing “will not fire the first shot, but in order to safeguard the country’s core interest and its people’s interest, China is being forced to strike back as necessary.”
Though the statement didn’t explicitly say that China’s retaliatory tariffs have taken effect, ministry and local officials confirmed shortly thereafter that the levies had kicked in. Beijing’s tariffs match the U.S.’s in value.
While the U.S. tariffs take aim at intermediate industrial goods from machinery to auto parts and medical devices imported from China, Beijing’s will hit U.S. farm products–like soybeans–as well as American-made sport-utility vehicles.
China’s state-controlled media took a sharply more critical tone in the hours leading up to and following the U.S. tariffs. People’s Daily, the newspaper of the ruling Communist Party, said the U.S., creator of the postwar global trading system, is now trying to change the rules to “sustain its first-mover advantage and ensure the global economic governance system always evolves in a direction that benefits the U.S.”
Xinhua, the government news agency, predicted that the U.S. “will be forced to return to its senses”–after paying “a terrible price.” China, it said, “stands on the moral high ground.”
Chinese officials also sought to play down the tariffs’ potential impact on the country’s $12 trillion economy–at least if they can be contained at $50 billion in each other’s products.
Ma Jun, an economist and member of the central bank’s monetary policy committee, forecast a hit to China’s economic growth of just 0.2 percentage point, according to Xinhua. It quoted Mr. Ma as saying the markets have already factored in the initial volley of tariffs.
In its statement, the Commerce Ministry said it will report to the World Trade Organization and work with other countries to protect the international free-trade system. Meanwhile, it said, the government would take measures to assist companies affected by the trade conflict.
Source: Dow Jones