China must retaliate against US tariffs, Commerce Ministry says
- China's Commerce Ministry has said it has no choice but to retaliate
- The Chinese Foreign Ministry said on Tuesday that the United States has not been "sincere"
- US has imposed 10 percent tariffs on $200 billion worth of Chinese imports
China has no choice but to retaliate against the latest round of U.S. tariffs in order to safeguard its rights and interest in a free trade world, the country's Commerce Ministry said in a statement on Tuesday.
While the statement gives no timeline or details of the nature of retaliation, it blames the U.S. for bringing uncertainty to the relationship between the two countries.
"The U.S. insists on increasing tariffs, which brings new uncertainty to the consultations between the two sides. It is hoped that the U.S. will recognize the possible negative consequences of such actions and take convincing means to correct them in a timely manner," the statement said.
Adding to these comments, the Chinese Foreign Ministry said on Tuesday that the United States has not been "sincere" and talks on an equal footing are the only way to resolve this issue.
The United States' current unilateral trade actions cannot be accepted by China, ministry spokesman Geng Shuang told a daily news briefing, Reuters reported.
More tariffs
On Monday, President Donald Trump announced he will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year.
The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals and other products such as bicycle helmets and high chairs.
"This is somewhat more severe than the market had anticipated, given recent rumors for an outright rate of 10 percent, and the tone of the statement was somewhat hawkish, including an assertion that 'if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports," Deutsche Bank said in a note to its clients on Tuesday.
The U.S. has already levied tariffs on $50 billion worth of Chinese products. Beijing responded with measures targeting $50 billion on American goods, raising fears about damage to the U.S. farm industry.
Earlier this month, reports suggested that the U.S. was seeking to restart trade talks with China.
In a research note on Tuesday, Mark Haefele, global chief investment officer at UBS Wealth Management said the U.S.-China trade tensions will get worse before they better.
"An intensification of the U.S.-China trade spat is a near-term negative for risky assets, raising the specter of an economically damaging trade war in which high tariffs are imposed on most or all U.S.-China trade."