Chinese government cautions the United States of the consequences if it continues its ‘wrong actions.’ The Beijing government warned, following U.S. President Donald Trump’s directive to increase tariffs on $550 billion imports from China.
“Such bullying trade and maximum pressure violate the consensus reached by the head of China and the United States,” said the commerce ministry of China.
The Asian economic powerhouse strongly urges the United States not to misjudge the situation or underestimate the capacity of the Chinese people.
“It violates the principle of mutual respect and mutual benefit, and seriously damages the multilateral trade system and the normal international trade order,” added the ministry.
Increased Tariffs on $550B Chinese Products
Earlier this month, Trump announced his plan to raise tariffs from 25% to 30% over $250 billion Chinese goods in October.
In a later statement, the U.S. government now taps the tariffs of $300 billion worth of Chinese imports from 10% to 15%; most apply on Sept. 1, others delayed until Dec. 15.
These series of tariff rise, according to White House economic adviser Larry Kudlow are Trump’s response to China’s tariff increase. Kudlow points out that China started the trade war with its resurgence of tariffs levied to $75 billion US-made imports.
Power to Declare a National Emergency
At the G-7 meeting, Trump said, “In many ways, this is a national emergency,” showing that he has the authority to declare the US-China trade war as a national emergency if he wanted to.
“I could declare [national emergency] when I think they steal and take out intellectual property. China’s theft amounts anywhere from $300 billion to $500 billion a year when we have a loss of almost a trillion dollars a year for many years,” he added.
However, Trump insisted that he has no plans right now to call for a national emergency.
Capacity to Pull Out US Businesses
Citing the International Emergency Economic Powers Act of 1977, Trump asserted that he could coerce businesses to pull back from China.
The law protects the United States from economic breakdowns and allows the president to target terrorists and minimize economic damages.
Kudlow affirmed that the U.S. could block private businesses from going to China, but the president is not his intention to do so.
Doubting Chinese Retaliation
Kudlow does not expect China to strike back against Trump’s actions when asked in CBS’ “Face the Nation.”
“I do not. I think the president’s decision was an action to respond to their action,” he said in the interview.
The economic adviser is confident that there is no retaliation from China, and he doubts whether they are going to take another step in this trade war.
Aiming for a Fair Trade
In pursuit of toning down the heat of the trade war between the two countries, Treasury Secretary Steven Mnuchin said, “The president is determined to have fair and reciprocal trade with China.”
Mnuchin firmly said that the President is not withdrawing his plans to raise tariffs on Chinese goods even though the president disclosed that he has “second thoughts.”