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Press Release

07 September 2018

China ready to retaliate if US imposes new tariffs

US-China trade tensions have taken another turn as Beijing has promised retaliation if Washington sets fresh tariffs in the coming days.
 
James Rowbury, Investment Research Coordinator, said: “With the potential for $200bn of Chinese goods to be levied at 25% on US entry, it doesn’t look like Beijing is backing down any time soon. The tariffs are set to be imposed next week. If no resolution is sought in the meantime, Gao Feng, China’s Economic Ministry spokesperson, has stated that China is ready to retaliate, when they are executed.
 
“Any reprisal could hit US exporters hard, as approximately 7.7% of its traded goods go to China. Nevertheless, as net exporters to the US, with approximately $440bn vs $122bn imports, China has a lot more to lose in this battle. Any imposed levies on Chinese goods will result in significant inflation on certain goods, though total imports from the region only represent around 2.3% of US GDP.
 
“With China unresolved, for now, all eyes turn to Japan, where President Trump is expected to target the US’s fourth-largest trading partner for a ‘better deal’.  While Japanese-US relations remain positive, Trump has claimed: ‘That will end as soon as I tell them how much they have to pay.’
 
“Prime Minister Shinzo Abe now faces a difficult balance between appeasing his supporters and standing strong against Trump, or accepting the potentially harmful tariffs.”
 
Ends
 
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China ready to retaliate if US imposes new tariffs
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