Donald Trump directed the US Trade Representative to prepare new tariffs on $200bn in Chinese imports on Monday as the two nations moved closer to a potential trade war.
The tariffs, which Trump wants set at a 10% rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries. Trump recently ordered tariffs on $50bn in Chinese goods in retaliation for intellectual properly theft. The tariffs were quickly matched by China on US exports.
“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology,” Trump said in a statement on Monday. “Rather than altering those practices, it is now threatening United States companies, workers and farmers who have done nothing wrong.”
Trump added: “These tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced.”
Trump said that if China responded to this fresh round of tariffs, then he would move to counter “by pursuing additional tariffs on another $200bn of goods”.
His statement was met by similarly strong language from China, where he was accused of “blackmail”.
China’s commerce ministry said on its website that if the US “irrationally” moves forward with the tariffs then China has no choice but to “forcefully fight back” with “qualitative” and “quantitative” measures. “China’s response is to safeguard the interests of the country and its people,” it said.
The US “practice of extreme pressure and blackmail departed from the consensus reached by both sides during multiple negotiations and has also greatly disappointed international society”.
The news hit stock markets in Asia, where Shanghai shed 3% in the morning, Hong Kong lost more than 2% and Tokyo was 1% lower.
Trump’s comments came hours after the top US diplomat accused China of engaging in “predatory economics 101” and an “unprecedented level of larceny” of intellectual property.
The US secretary of state, Mike Pompeo, made the remarks at the Detroit Economic Club as global markets reacted to trade tensions between the US and China. Both nations started putting trade tariffs in motion that are set to take effect on 6 July.
He said China’s recent claims of “openness and globalization” were “a joke”. He added that China was “long overdue in being tackled” over matters that include IP theft and Chinese steel and aluminum flooding the US market.
“It’s an unprecedented level of larceny,” he said.
“Just ask yourself: would China have allowed America to do to it what China has done to America?” he said later. “This is predatory economics 101.”
The Chinese embassy in Washington did not immediately respond to a request for comment.
Pompeo raised the trade issue directly with China last week, when he met in Beijing with the Chinese president, Xi Jinping, and others.
“I reminded him that’s not fair competition,” Pompeo said.
Trump had announced a 25% tariff on up to $50bn in Chinese imports. China is retaliating by raising import duties on $34bn worth of American goods, including soybeans, electric cars and whiskey. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.
Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump’s watch. Gary Cohn, Trump’s former top economic adviser, said last week that a “tariff battle” could result in price inflation and consumer debt – “historic ingredients for an economic slowdown”.
Pompeo on Monday described US actions as “economic diplomacy”, which, when done right, strengthened national security and international alliances, he added.