China threatens ‘countermeasures’ on trade, without saying more

24-Aug-2019 Intellasia | CNBC | 6:02 AM Print This Post

* “If the US obstinately clings to its own way, China has no choice but to take corresponding countermeasures,” Ministry of Commerce Spokesman Gao Feng said Thursday in Mandarin, according to a CNBC translation.

* Gao also declined to provide specifics on an “unreliable entities list” or whether it would be used as a countermeasure to US actions on trade.

China is still short on details on how it will respond to new US tariffs on Chinese goods.

“If the US obstinately clings to its own way, China has no choice but to take corresponding countermeasures,” Ministry of Commerce Spokesman Gao Feng said Thursday in Mandarin, according to a CNBC translation. “The US should change its wrong actions.” He did not elaborate on what those measures might entail, but emphasized the need for fairness in trade negotiations.

Chinese President Xi Jinping and President Donald Trump at the G-20 Summit in Osaka on June 29, 2019. (AFP)

Chinese President Xi Jinping and President Donald Trump at the G-20 Summit in Osaka on June 29, 2019. (AFP)

The US and China have been embroiled in a trade dispute for more than a year.

President Donald Trump threatened earlier this month to raise tariffs on the remaining $300 billion worth of Chinese goods not yet subject to duties. His administration later delayed the effective date for some of the new tariffs from September 1 to December 15, ostensibly to reduce the impact on the holiday shopping season.

Gao’s wording echoed the little official commentary that has come out on the US tariffs. The Ministry of Finance said last week on its website, citing a person from the Customs Tariff Commission of the State Council, that China will have to take “necessary countermeasures,” according to a CNBC translation.

China’s ‘unreliable entities’ list

On Thursday, Gao declined to provide specifics on an “unreliable entities list” or whether it would be used as a countermeasure to US actions on trade. China has threatened that foreign companies, organisations and individuals could be added to the list, which was announced in late May. Few details have emerged since.

Beijing’s list came after the Trump administration said it would add Chinese telecommunications giant Huawei to a blacklist that essentially prevents it from doing business with its US suppliers.

The trade war has shifted from focus on America’s large trade deficit with China to technological competition, and has touched on a range of issues such as rare earths and agricultural products.

China has previously threatened to use the country’s dominance in the global production of rare earths used in many consumer electronics as a tool in the trade war. Another point of leverage is China’s position as one of the largest buyers of US agricultural products.

On the other hand, the US has been a primary market for Chinese goods. But trade between the two countries has moderated amid escalating tensions. Chinese exports to the US have fallen for eight straight months, according to China Customs data from Wind Information.

Nick Marro, global trade lead at The Economist Intelligence Unit said in an email Thursday that while China will likely counter with new duties, most imported US goods are already subject to tariffs.

Instead, he expects Beijing’s approach will emphasize tightening of administrative and regulatory measures against foreign firms, and could enact the unreliable entities list by the end of the year.

“This (approach) includes an enhancement of environmental, cybersecurity or anti-trust investigations against certain companieswhich China is in its rights to do, based on its existing policy framework,” Marro said. “That, in turn, makes it difficult for US companies to explicitly judge this as trade war retaliation, as China could claim that it’s simply enforcing its laws.”

The US and Chinese trade delegations held a high-level phone call on August 13 and agreed to speak again in the next two weeks.

https://www.cnbc.com/2019/08/22/china-threatens-countermeasures-on-trade-without-saying-more.html

 


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