“China opens fire” in the world with tariff threats, China says

BEIJING (Reuters) – The United States is "opening fire" on the world with its tariffs threatened, China warned on Thursday, saying no one wants a trade war, but will respond when the US measures come into force. As Beijing raised up the rhetoric in the heated dispute.

The Trump administration's tariffs on $ 34 billion of Chinese imports will come into effect at 0401 GMT on Friday, which is just after noon in Beijing.

U.S. President Donald Trump has threatened to escalate the trade dispute with tariffs on up to $ 450 billion in Chinese goods if China retaliates, with the turbulent row of financial markets including stocks, currencies and global commodity trade from soybeans to coal. .

China has said it will not "launch the first shot," but its customs agency made it clear on Thursday that Chinese tariffs on US goods will come into effect immediately after US tariffs on Chinese goods come into force. .

Speaking at a weekly press conference, Ministry of Commerce spokesman Gao Feng warned that proposed US tariffs would reach international supply chains, including foreign companies in the world's second largest economy.

"If the US implements tariffs, they will actually add tariffs to companies in all countries, including Chinese and US companies," Gao said.

"U.S. the measures are essentially attacking global supply and value chains." To put it simply, the US is opening fire all over the world, including itself, "he said.

"China will not bow to threats and blackmail and will not falter in its determination to defend free trade and the multilateral system."

Asked if US companies would be attacked with "qualitative measures" in China in a trade war, Gao said the government would protect the legal rights of all foreign companies in the country.

"We will continue to evaluate the potential impact of the trade war initiated by the US In companies and we will help companies to mitigate potential impacts."

Gao said that China's foreign trade is expected to continue on a stable path in the second half of the year, although investors fear that a trade war between China and the United States as a whole will affect Chinese exports and its economy.

Foreign companies accounted for $ 20 billion, or 59 percent, of the $ 34 billion of Chinese exports that will be subject to new US tariffs. UU., With the American firms representing a significant part of that 59 percent, said Gao.

At a separate press conference, Chinese Foreign Ministry spokesman Lu Kang sidestepped a question about whether efforts had been made to start new talks with the United States.

"Of course, we do not want to fight in a trade war, but if the legitimate interests of a country are hurt, then, of course, that country has the right to firmly protect its own interests," Lu said.

China's plans to impose tariffs on hundreds of US products point to some major US exports, including soy, sorghum and cotton, threatening US farmers in states that backed Trump, such as Texas and Iowa

The Chinese purchase of soy has stopped almost entirely before tariffs, while Chinese farmers fear that sanctions and supply will reduce costs, reduce margins and finally inflate retail prices of pork , the most sold in the country.

In the last sign that the risk of sanctions is affecting trade, a ship carrying coal from the US. UU And headed for China was diverted to Singapore on Wednesday.

GLOBAL RISKS

The World Trade Organization warned on Wednesday that the trade barriers that are being erected by major economies could jeopardize the global economic recovery, and its effects are beginning to show.

To compound tensions, a Chinese court banned Micron Technology Inc. ( MU.O ) this week from selling its main semiconductor products in the largest market of memory chips, citing patent infringement in the hands of United Microelectronics Corp (UMC) of Taiwan ( 2303.TW ).

Beijing has made the semiconductor industry a key priority of its "Made in China 2025" strategy, which accelerated after the United States banned sales to the Chinese company ZTE Corp ( 000063.SZ ) underscored the lack of China's national chips.

Chinese stocks fell on Thursday and the yuan stabilized due to previous losses, as a selective cut of reserve requirements for banks came into effect amid trade tensions.

China's central bank moved to calm nervous markets on Tuesday after the yuan touched its lowest level in nearly a year.

A trade war with the United States could hit China's export machine. Economic growth in the second quarter is expected to slow slightly, according to a Reuters poll, as Beijing seeks to mitigate the impact of a risk reduction campaign and the trade dispute with the United States.

LITTLE HOPE

Both Chinese and US commercial sources. UU In China they said there seemed to be little hope that tariffs could be avoided.

"I'm afraid not, for now," said Tu Xinquan, a trade expert at the Beijing University of International Business and Economics, who advised the Chinese government.

A source in the US industry said: "There is a 99 percent chance that rates will come into effect on Friday."

"Quite frankly, I do not know what action China could take at this time to allow the US not to impose tariffs," said the US source. UU., And added that there was no evidence that the two governments had a substantial commitment at the time that could lead to the elimination of tariffs.

A senior Western diplomat told Reuters there was no sign of any conversation at this time between the two countries, even through secondary channels.

The industry source said China could not address the Trump administration's concerns about China's trade policies in at least five key areas, including forced technology transfers, Chinese industrial overcapacity, government subsidies, SOE reform and restrictions. of Beijing in the cloud computing industry.