By Joe Cash and Yukun Zhang
BEIJING – China hiked its levies on imports of US goods to 125 percent on Friday, hitting back at Donald Trump’s decision to single out the world’s No.2 economy for higher duties, while dismissing the US president’s tariff strategy as “a joke.”
Investors had been waiting to see how Beijing would respond to Trump’s move on Wednesday to effectively raise tariffs on Chinese goods to 145 percent while announcing a 90-day pause on duties on dozens of other countries’ goods. The yuan slipped to levels last seen during the global financial crisis on Thursday but rebounded slightly on Friday.
“The US side’s imposition of excessively high tariffs on China seriously violates international economic and trade rules, runs counter to basic economic principles and common sense, and is simply an act of unilateral bullying and coercion,” China’s Finance Ministry said in a statement.
The tit-for-tat increases stand to make goods trade between the world’s two largest economies impossible, analysts say, with import duties above around 35 percent wiping out Chinese exporters’ profit margins and making American offerings in China similarly overly expensive.
Beijing indicated on Friday that this would be the last time it matched the US, in the event that Trump takes his tariffs any higher.
“Even if the US continues to impose even higher tariffs, it would no longer have any economic significance and would go down as a joke in the history of world economics,” the Finance Ministry’s statement added.
“If the US continues to play a numbers game with tariffs, China will not respond,” it added. However it left the door open for Beijing to turn to other types of retaliation, reiterating that China would fight the US to the end.
