President Donald Trump has ordered his administration officials to draft plans for tariffs on a further $200bn in Chinese imports if Beijing does not abandon its intention to retaliate against US duties on imports announced last week.
In a statement issued late on Monday, Mr Trump said he had asked US trade officials to identify a further $200bn in goods from China to be subject to a 10 percent tariff, and that he was prepared to impose tariffs on an additional $200bn beyond that. China’s commerce ministry said the threat was “blackmail” and warned of “strong countermeasures,” while its foreign ministry said the US “had once again incited a trade war”. The US move marked a further escalation in the trade conflict between Beijing and the Trump administration, which have both already imposed tariffs on steel, aluminum and some agricultural goods and each promised further duties on $50bn in trade. Many analysts fear that neither Beijing nor Washington — which traded about $636bn in goods last year — will back down, resulting in an all-out trade war that could destabilize the global economy.
Mr Trump is under domestic pressure to take a tough stance on China. The US Senate on Monday passed a measure that would reverse a deal that his administration made with Chinese company ZTE to lift a ban on its sourcing of US components. The ban was imposed in April over ZTE’s violations of US sanctions on Iran and North Korea. Whether that measure will become law is unclear and the administration opposes it, yet it reflects a growing anti-China sentiment in Washington.