China-US trade war escalates as Beijing issues tariff list for US$16 billion worth of American goods
Veiled attack on Trump administration probably in tune with views of China’s top leaders
Beijing warned it was ready to impose retaliatory tariffs on US$16 billion worth of American goods to match the finalised list of tariffs Washington released overnight, another escalation in the trade war that will loom large as China's top leaders gather for their annual summer summit.
The announcement comes on the heels of the US publishing the list of Chinese products that will face 25 per cent duties starting on August 23, raising the value of punitive tariffs to US$50 billion from US$34 billion.
It comes after Beijing issued a rallying cry against Washington’s “stick of hegemony” in their intensifying trade war.
In an apparent rebuke of US President Donald Trump, state media featured a signed editorial on Wednesday decrying those who refuse to allow China to rise as a great power and instead use “selfish” tactics to contain it.
The lengthy commentary from Xinhua was identified as Xuan Yan, or “declaration”, indicating it is likely a reflection of thinking from the top echelons of the ruling Communist Party.
“Unwilling to see the lion awaken and the dragon in flight, or to witness 1.3 billion people lead happy lives, some people have taken the approach of unilateralism, protectionism, and trade bullying,” it said, an unspoken reference to the Trump administration’s America-first take on trade. “These are challenges that cannot be avoided, and must be dealt with.”
The piece, splashed across the front pages of major papers, comes as Chinese President Xi Jinping and other top leaders are at the seaside resort of Beidaihe for the elite summer gathering, where the escalating trade war with the US will likely top the agenda. The summer conclave represents a chance for top officials to take a break from day-to-day duties to focus on strategic deliberation.
“Certain people are selfishly moving against the tide of morality, wantonly building up trade barriers and wielding the stick of hegemony,” it said. “Although they may be pleased with themselves for now, they can hardly resolve the deep disputes of economic imbalance and political disorder, they will eventually shoot themselves in the foot.”
Beijing has already been forced to take a more restrained approach in the trade war, threatening a range of retaliatory tariffs from 5 to 25 per cent on US$60 billion in US goods last week, as it finds itself unable to take a direct tit-for-tat approach to US tariffs. The back-and-forth salvoes have already seen the White House raise the spectre of levying tariffs on another US$200 billion in Chinese products, with Trump warning he is prepared to raise the amount to all US$500 billion imports.
Analysts say China’s latest spectrum-based countermeasures, with lower duties assigned to goods that would be more difficult to substitute from the US market, suggests a focus on mitigating damage to its domestic economy. The strategy of self-preservation comes in the midst of stalled trade negotiations between both sides, with the dispute expected to stretch past the November US midterm elections.
At the heart of the conflict is Washington’s charge that Beijing has long engaged in unfair trade and intellectual property practices, with forced technology transfers that have fuelled its “Made in China 2025” industrial policy, one China is unlikely to give up in its ambitions to become a technological superpower.
As rumblings of discontent have emerged among China’s liberal intellectuals over Beijing’s handling of the trade dispute, observers believe the bitter trade conflict between the world’s two largest economies will be one of the greatest tests of Xi’s second term.
The Xinhua piece avoided directly referencing Trump’s policies, a sign of restraint from earlier state media attacks on Trump’s “arrogance.” It instead touted China’s four decades of economic advancement, with this year the 40th anniversary of the country’s “reform and opening up”, and insisted the country could weather any storms that lie ahead.
“China is still one of the countries with the best development, greatest potential, and resilience,” it said. “Nothing can stop the Chinese people, our path towards building better lives.