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Abu Dhabi, UAESaturday 17 November 2018

China ready for 'protracted' trade war with US

Beijing unveils plans for tariffs on more than 5,000 types of US goods

A worker packs bottles of oil made from imported US soybeans at a plant in Shandong province. Reuters
A worker packs bottles of oil made from imported US soybeans at a plant in Shandong province. Reuters

After a weekend of claims by US President Donald Trump that he has the upper hand in the trade war with China, Beijing responded through state media by saying the nation is ready to withstand the economic fallout.

China is prepared for a “protracted war” and does not fear sacrificing short-term economic interests, according to an editorial in the nationalist Global Times on Sunday evening. “Considering the unreasonable US demands, a trade war is an act that aims to crush China’s economic sovereignty, trying to force China to be a US economic vassal.”

The exchange of barbs came after Beijing on Friday released a new tariff list designed to retaliate against the US threat to impose new duties on $200 billion (Dh734.5bn) of Chinese imports. The heightened tension comes amid a slowing of China’s economy, declines in the currency and a bear market in stocks.

Mr Trump told supporters on Saturday that playing hardball on trade is “my thing”.

“We have really rebuilt China, and it’s time that we rebuild our own country now,” Mr Trump said during about an hour of free-wheeling remarks at a rally outside Columbus, Ohio. China’s market declines weaken the country's bargaining power in the escalating trade war, he said.

Mr Trump continued his focus on tariffs on Sunday morning, tweeting that the duties are working “big time” and that imported goods should be taxed or made in the US. He also suggested duties would enable the US to reduce “large amounts of the $21 trillion in debt that has been accumulated” and to reduce taxes for Americans.

“Every country on earth wants to take wealth out of the US, always to our detriment,” he tweeted. “I say, as they come, Tax them.”

China's finance ministry said duties ranging from 5 per cent to 25 per cent would be levied on 5,207 kinds of imports from America if the US implemented its proposed taxes on another $200bn of Chinese goods.

Last week, Mr Trump ordered officials to consider imposing a 25 per cent tax on $200bn worth of imported Chinese goods, up from an initial 10 per cent rate. The move was intended to bring China back to the negotiating table for talks over US demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit, but China’s response suggests the move had failed.

“In the face of the bullying of the Donald Trump administration, Beijing must remain sober-minded and never let emotion override reason when deciding how to respond,” according to an editorial by the China Daily, the flagship state-run English language newspaper.

“Given China’s huge market, its systemic advantage of being able to concentrate resources on big projects, its people’s tenacity in enduring hardships and its steadiness in implementing reform and opening-up policies, the country can survive a trade war.”