China dares US over Trump’s new tariff increase threat

China has advised the United States to correct its attitude and not try to engage in cheap blackmail through the threat of tariff hike on Chinese products.

It urged the United States to “calm down” and return to reason after the Trump administration sought to ratchet up pressure for trade concessions by proposing a higher 25-percent tariff on $200 billion worth of Chinese imports.

U.S. Trade Representative Robert Lighthizer said on Wednesday that President Donald Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet U.S. demands and has imposed retaliatory tariffs on U.S. goods.

Trump’s threats of higher tariffs weighed on China’s financial markets. But Wang Yi, the Chinese government’s top diplomat, said U.S. efforts to pressure China would be in vain, urging its trade policymakers to “calm down”.

“We hope that those directly involved in the United States’ trade policies can calm down, carefully listen to the voices of U.S. consumers…and hear the collective call of the international community,” Wang, a member of the country’s state council, or cabinet, said in Singapore.

Worsening trade tension between the two countries would not affect China’s stance on the denuclearization of the Korean peninsula, Wang said. “We deal with diplomatic matters on the basis of principle, not by engaging in trade.”

The Chinese yuan also ticked lower against the dollar, extending its year-to-date decline to more than 4.5 percent.

There have been no formal talks between Washington and Beijing for weeks over Trump’s demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.

Two Trump administration officials told reporters on a conference call that Trump remains open to communications with Beijing and that through informal conversations the two countries are discussing whether a “fruitful negotiation” is possible.

The higher tariff rate, if adopted, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China’s retaliatory tariffs on an initial round of U.S. tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

China’s commerce ministry said the U.S. tactics would have no effect on China, and would disappoint countries that are against trade wars.

“China is fully prepared for the United States’ threats to escalate the two countries’ trade war and will have to fight back to defend its dignity and the interests of its people,” it said in a statement posted on its website.

Trump has ultimately threatened tariffs on more than $500 billion in Chinese goods, covering virtually all U.S. imports from China.