China will file a claim with the WTO and take necessary countermeasures to safeguard its interests, the Ministry of Commerce said on Sunday after the US announced it would impose tariffs on Chinese goods.
“The unilateral tariff hikes by the US seriously violate World Trade Organization rules,” the ministry said, adding that the move “not only fails to address America’s own issues” but also “disrupts normal China-US economic and trade cooperation”.
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The ministry’s statement followed US President Donald Trump’s decision on Saturday to sign an executive order imposing a 10 per cent tariff on Chinese imports in response to what he said was the failure of Chinese officials to stem the flow of precursor chemicals for fentanyl into the United States.
Fentanyl is a powerful synthetic opioid that has led to hundreds of thousands of deaths in North America.
The White House also referred China’s “intellectual property theft, forced technology transfer, and other unreasonable behaviour”, as well as illegal immigration “including a rising number of Chinese nationals and people on the terror watch list”.
The Chinese Ministry of Foreign Affairs reaffirmed Beijing’s efforts to control the illegal production of fentanyl, saying the country was “one of the world’s strictest and most thorough enforcers of anti-narcotics policies”.
“The fentanyl crisis is a problem of the United States, and out of humanitarian concern, China has supported US efforts to tackle the issue,” the foreign ministry said.
It called the tariffs “unconstructive”, saying they would “inevitably impact and undermine” future cooperation between the two sides on drug control.
“We urge the US to correct its wrongful actions, safeguard the hard-won progress in bilateral anti-drug cooperation, and promote the stable, healthy, and sustainable development of China-US relations,” the foreign ministry said.
Along with the tariffs on Chinese imports, Trump also signed orders to impose a 25 per cent tariff on goods from Canada and Mexico. The tariffs will go into effect on Tuesday and will be on top of those already in place.
Gary Ng, a senior economist at French investment bank Natixis, said the executive orders marked a new trade war era, with the US “using tariffs to achieve US economic and geopolitical goals, regardless of whether they are (against) allies”.
“The move has brought the tariffs on the US’ biggest trading partners to a more similar level (as those on China),” Ng said.
He said China could take a range of retaliatory measures, including imposing reciprocal tariffs, introducing export controls on certain critical materials, and restricting market access for certain American firms.
Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said the 10 per cent tariffs signed off by Trump were “not a big shock to China’s economy”.
“It’s unlikely to change the market expectation of China’s macro outlook this year, which already factored in higher tariffs from the US,” Zhang said.
The tariffs on China are also well below the 60 per cent import duties Trump threatened to enact at various points on the presidential campaign trail last year.
Zhang added the focus of the US trade policy announced on the weekend was on Canada and Mexico, not China, pointing to the differing tariff rates imposed on each country.
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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