China will survive its escalating trade conflict with the United States, the Chinese authorities have warned through state media.
On Friday, the Chinese government announced a list of possible tariffs ranging from 5% to 25% on $60 billion worth of U.S. agricultural, metal, and chemical goods. The tariffs would go into effect if the U.S. makes good on its threat to raise tariffs to 25% on some $200 billion worth of Chinese goods.
The next day, President Donald Trump said the U.S. still has the upper hand in the argument.
“China has to defend its right to development, and we don’t fear sacrificing short-term interests,” The Global Times wrote in an editorial. “The U.S. is trying to conclude the trade disputes swiftly, but China is prepared for a protracted war…In future, the U.S. economy will depend more on the Chinese market than the other way around.” But the editorial also highlighted China’s rationality and said its people do not want a trade war.
The list of almost 6,000 items that China unveiled Friday may be meant more to save face than as a direct tit-for-tat, as 500 of the listed items aren’t traded in the first place and another 2,000 see less than $1 million a year in imports, Bloomberg reported. Meanwhile, the American side has played down the trade war’s impacts on its own economy, with President Trump claiming without evidence that U.S. Steel would open several new steel mills due to U.S. tariffs on foreign steel.
The two countries already impose mutual tariffs on some $34 billion worth of goods and the U.S. has prepared additional tariffs for another $16 billion worth, so the additional threatened tariffs would represent major escalations.
The trade giants are in the midst of stop-and-go trade negotiations. China has complained to the World Trade Organization about the U.S. tariffs. Such disputes are common: the U.S. and China had a total of 32 on-going disputes last month, and the U.S. and EU had 52.