BEIJING: China said on Wednesday that “blackmail” wouldn’t work and that it would hit back if the United States takes further steps hindering trade, as the Trump administration considers slapping a 25 per cent tariff on $200 billion worth of Chinese goods.

The proposal would increase the potential tariff rate from 10pc the administration had initially put forward on July 10 for that wave of duties in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday.

The tariffs target thousands of Chinese imports, including food products, chemicals, steel and aluminum and consumer goods ranging from dog food, furniture and carpets to car tires, bicycles, and baseball gloves and beauty products.

While the duties would not be imposed until after a period of public comment, raising the proposed level to 25pc would escalate the already bitter trade dispute between the world’s two biggest economies.

The source said President Donald Trump’s administration could announce the tougher proposal as early as Wednesday in Washington. The plan to more than double the tariff rate was first reported by Bloomberg News.

China, which has accused the United States of bullying, again vowed to retaliate if Trump proceeds with the measures, warning that pressure tactics would fail.

“US pressure and blackmail won’t have an effect. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights,” Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing.

Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent US business groups, while weary of what they see as China’s mercantilist trade practices, have condemned Trump’s aggressive tariffs.

Representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have been speaking privately as they seek to restart negotiations to defuse the budding trade war, Bloomberg reported, citing sources.

A spokeswoman for the US Trade Representative’s Office declined to comment on the proposed tariff rate increase or on whether any changes would alter the deadlines laid out for comment period before implementation.

Asked about communication between the two countries on the dispute, Geng said China had “always upheld using dialogue and consultations to handle trade frictions”, but that dialogue must be based on mutual respect and equality.

“Unilateral threats and pressure will only produce the opposite of the desired result,” Geng said.

Published in Dawn, August 2nd, 2018

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