After unveiling plans to impose additional tariffs on Chinese goods worth around 50 billion USA dollars, the United States went even further by threatening to identify 200 billion US dollars worth of Chinese products for additional tariffs.
China has underestimated President Donald Trump's resolve to press ahead with tariffs unless Beijing changes its "predatory" trade practices, a top USA trade adviser said on Tuesday, in comments that undercut the chances of a negotiated settlement to a looming trade war between the world's economic superpowers.
Despite the threat from Trump, China vowed to retaliate with "strong" countermeasures if the US goes ahead with the new tariffs. This example highlights that any imposition of tariffs on Chinese goods will not only impact the Chinese economy.
Mr Trump's comments came hours after the top USA diplomat accused China of engaging in "predatory economics 101" and an "unprecedented level of larceny" of intellectual property.
The ongoing trade dispute between the United States and China knocked the yuan to 6.4660 per dollar, its weakest in more than five months in the offshore market.
Commodities have also suffered because of the rising USA dollar following the Federal Reserve's decision to raise rates last week, he said.
So China is threatening "qualitative measures" (质量型的措施 zhìliàng xíng de cuòshī), in addition to quantitative ones - i.e., tariffs - according to a statement (in Chinese, in English) by the Chinese Ministry of Commerce. He added that China is a "predatory economic government" that is "long overdue in being tackled", matters that include IP theft and Chinese steel and aluminum flooding the US market.
White House National Trade Council Director Peter Navarro told FOX Business' Lou Dobbs that the Chinese government has underestimated President Trump's resolve to move forward with tariffs to end China's predatory trade policies.
Later on Friday, China announced its own tariffs on American goods, including a wide range of seafood and agricultural products, many cars and trucks, petrochemicals and an array of medical equipment.
Beijing could also seek to make life hard for big United States companies that rely on the Chinese market for a big chunk of their revenue.
Flags of USA and China are placed for a meeting in Beijing on June 30, 2017. Although China has a total of only USD130bn to put tariffs on (versus the USD500bn of Chinese imports into the US), China has other tools to use in the trade conflict.
But, he said, "the United States will no longer be taken advantage of on trade by China and other countries in the world". On Friday evening, China announced tariffs on United States products of an equal amount and implemented them on the same date (6 July) as the USA intends to implement tariffs on China. In 2017, the USA imported about $506 billion in goods from China.
Tariffs on other U.S. goods will be announced at a later date, the Xinhua news agency reported.