US tariff row: China vows to ‘fight to the end'

Beijing slammed the United States for threatening to raise tariffs and pledged to retaliate if Washington follows through, raising the stakes of the trade war between the world’s two largest economies.

“The US threat to escalate tariffs on China is a mistake on top of a mistake, which once again exposes the extortionate nature of the US,” the Chinese Ministry of Commerce said in a Tuesday statement. “If the US insists on its own way, China will fight to the end.”

A gauge of Chinese stocks listed in Hong Kong climbed 1.7% at the open as the nation’s state-backed funds vowed to support the market. The index sank more than 13 per cent on Monday.

Beijing and Washington are already on track to raise blanket tariffs on each other this week. Trump on Monday added a new threat to put an additional 50% levy on Chinese imports. 

That new charge would come on top of the 34 per cent “reciprocal” duty announced last week as well as a 20 per cent levy that entered effect earlier this year, according to a White House official. That takes the cumulative tariff announced this year to 104 per cent, or effectively doubling the import price of any good shipped from China to the US.

Earlier in the week the Communist Party’s official newspaper published an editorial declaring Beijing is no longer “clinging to illusions” of striking a deal, even as it leaves a door open to negotiations. 

The escalation of tensions is dimming the prospect of any imminent leadership call. Trump hasn’t spoken with Chinese President Xi Jinping since returning to the White House, the longest a US president has gone without talking to his Chinese counterpart post-inauguration in 20 years.

US threats and pressure are “not the right way to engage” with China and the nation will defend its interests, China’s embassy in Washington said.

“The US hegemonic move in the name of ‘reciprocity’ serves its selfish interests at the expense of other countries’ legitimate interests and puts ‘America first’ over international rules,” embassy spokesman Liu Pengyu said in response to a question on the latest US move.

“China will firmly safeguard its legitimate rights and interests,” he said, without specifying any actions.