The Chinese are not taking the United States’ latest tariff threat lightly and vowed to retaliate if the U.S. moves forward with it.
“China is fully prepared and will have to retaliate to defend the nation’s dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries,” the Chinese Ministry of Commerce said in a statement on Thursday. “The carrot and stick tactic won’t work.”
The ministry’s remarks come after President Donald Trump instructed U.S. Trade Representative Robert Lighthizer to consider raising proposed tariffs on $200 billion in Chinese goods to 25 percent from 10 percent.
Trade tensions between the U.S. and China — the world’s two largest economies — have been increasing recently. The U.S. has already imposed tariffs on $34 billion in Chinese imports, which were met with retaliatory charges by China.
“The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear about the specific changes China should undertake,” Lighthizer said in a statement on Wednesday. “Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.”
Worries around trade have kept investors on edge as they try to assess what will be the impact of a global trade war on capital markets and the global economy.
U.S. stock futures fell sharply on Thursday, with Dow Jones Industrial Average futures falling 150 points. Asian stocks fell broadly, with the Shanghai Composite and the Nikkei 225 dropping 2 percent and 1.03 percent, respectively.
“China has consistently advocated resolving differences through dialogue, but only on the condition that we treat each other equally and honor our words,” the ministry said.