China has pledged to retaliate if the US introduces fresh tariffs on $300bn worth of Chinese goods, in moves that would jeopardise recently resumed talks between the countries.

Only hours after US trade negotiators returned from high-level meetings with their Chinese counterparts in Shanghai, Donald Trump said in a tweet that he planned to impose a 10 per cent tariff on $300bn of additional Chinese products from September 1.

China’s commerce ministry on Friday said that it was “strongly dissatisfied” with the US announcement, which “seriously violates” the agreement reached by Mr Trump and China’s president Xi Jinping.

If the tariffs are imposed, China “will have to take necessary countermeasures”, a ministry spokesman said, without giving details of what steps China might take.

“All the consequences will be borne by the US,” he added.

The negotiations in Shanghai were the first round of face-to-face meetings since a tentative trade war truce between Mr Trump and Mr Jinping was brokered at the G20 in Japan last month following a collapse of the talks in May.

China’s foreign ministry also suggested on Friday that the threat from Mr Trump could scupper plans for a second round of negotiations in Washington next month.

Asked whether the announced plans would still go ahead, ministry spokeswoman Hua Chunying said: “We believe the ball is currently in the United States’ court. At this time, the United States must demonstrate sincerity.”

Hu Xijin, editor of the nationalist state-run Global Times tabloid, said that the new round of tariffs would have the opposite effect of what Mr Trump was intending.

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“New tariffs will by no means bring closer a deal that the US wants, it will only make it further away,” Mr Hu said in a tweet. 

Mr Trump’s announcement sparked steep sell-offs across global markets and a rush of haven buying of government bonds, as the prospect of a deepening dispute threatened to dent global growth.

China’s renminbi hit its lowest level this year, raising the prospect of it breaking through the psychologically important 7 to the dollar mark, an outcome China’s central bank has firmly defended against in past periods of weakness.

If Mr Trump follows through on his latest tariff threat against China, it would mean that all of its exports to the US would be covered by levies, including a number of consumer goods from toys to clothing and footwear.

China repeatedly said it would retaliate in kind for any US tariffs and pledged to use unspecified “qualitative” measures if it was unable to impose an equal value of tariffs, because of the trade imbalance between the countries.

An announcement by Beijing on May 31 that it was drawing up an “unreliable” entities list further spooked US companies, which fear their business in China could be caught in the trade row’s crossfire.

Aside from tariffs, US companies have said they fear forms of retaliation such as slower customs clearance, more inspections and delayed approvals for licences. 

Mr Trump also suggested in his tweets that China was failing to follow through on its pledges to buy more US farm products and restrict the flow of fentanyl to the US.

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This appeared to contradict a statement from China’s commerce ministry on Thursday, which said that Chinese companies had begun asking for quotes from US companies for soyabeans, cotton, pork and sorghum on July 19 and that some new purchases had been made, without giving any figures. 

Additional reporting by Colby Smith in New York, Tom Hancock in Shanghai and Siddarth Shrikanth and Daniel Shane in Hong Kong

Via Financial Times