China warns the United States against responding to Trump’s threat to impose 100% tariffs | Trump’s definitions
Beijing has told the US it will retaliate if Donald Trump fails to back down from his threat to impose 100% tariffs on Chinese imports, as investors brace for another wave of trade war turmoil.
China’s Commerce Ministry blamed Washington for stoking trade tensions between the two countries after Trump announced on Friday that he would impose additional tariffs on China’s exports to the United States, along with new controls on critical software, by November 1.
“Deliberate threats to impose high tariffs are not the right way to reconcile with China,” Xinhua News Agency quoted a Commerce Ministry spokesman as saying on Sunday. “China’s position on the trade war is consistent. We don’t want it, but we’re not afraid of it.
He added: “If the United States insists on going in the wrong direction, China will certainly take firm measures to protect its legitimate rights and interests.”
The US President shocked financial markets on Friday when he accused China of taking “very aggressive” steps to restrict exports of rare earth materials needed by US industry.
This led to sharp falls on Wall Street, where around $2 trillion (£1.5 trillion) was wiped off the value of US stocks.
China insisted on Sunday that its latest controls on exports of rare earth elements such as holmium, erbium, thulium, europium and ytterbium were legitimate.
“Chinese export controls are not an export ban,” a Commerce Ministry spokesman said. “All compliant export applications for civilian use can receive approval, so that relevant companies do not have to worry.”
The measures were introduced after Washington added a number of Chinese companies to its export control list in a crackdown on the use of foreign affiliates to circumvent export restrictions on chipmaking equipment and other goods and technology.
Britain’s FTSE 100 index fell nearly 1% on Friday as Trump’s threat sparked a late sell-off. The futures market suggests there could be further losses in London and New York on Monday, although there may also be relief that Beijing has not yet retaliated.
Bitcoin, which fell 8% after Trump’s post on Truth Social, rose 1.5% on Sunday after China refrained from responding.
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Michael Brown, senior research strategist at brokerage Pepperstone, said Trump’s tariff threat was “a somewhat unwelcome development for financial markets” because investors had “largely moved away from the trade and tariffs story”.
“Mainly, the question Every Man and His Dog is trying to answer is whether this is a real threat, one that the Trump administration might pursue, or whether this is another example of the ‘escalate to de-escalate’ strategy that Trump used repeatedly earlier in the year.
“A strategy in which strange and ridiculous identification numbers are threatened, in an attempt to focus minds, extract concessions from the other party, and ultimately reach an agreement faster than would otherwise have been possible.”