BEIJING: China on Saturday increased tariffs on billions worth of US goods as it prepares to unveil a blacklist of “unreliable” foreign companies that analysts say aims to punish US and foreign firms cutting off supplies to telecoms giant Huawei.

Beijing’s move hits $60 billion worth of US goods with new punitive tariffs ranging from five to 25 per cent, and comes in retaliation for Washington raising duty on $200bn in Chinese goods to 25pc.

Washington and Beijing resumed their trade battle last month when trade talks in the US ended without a deal, with American negotiators accusing Chinese negotiators of reneging on previous commitments.

The countries have exchanged tariffs on $360bn in two-way trade so far.

The tit-for-tat tariff war has been upstaged in recent weeks by Washington’s move to blacklist Chinese tech giant Huawei over national security concerns, threatening the firm’s global ambitions.

The US Commerce Department placed Huawei on an “entity list” on grounds of national security on May 16, a move that curbs its access to US-made components it needs for its equipment. A 90-day reprieve was later issued.

Hitting back, China’s commerce ministry said on Friday it would release its own list of “unreliable entities” that break their commercial contracts and stop supplying Chinese firms.

“For China’s countermeasures, what we say, we do,” said anchor Kang Hui on Chinese state broadcaster CCTV’s primetime news show that aired across multiple Chinese stations on Friday.

“Talk and our door is open. Fight, and we’ll fight to the end,” said Kang.

China’s commerce ministry said it would roll out the detailed measures against companies on the list shortly, noting foreign firms that break contracts, cut off supplies or take other discriminatory measures against Chinese firms would be included.

In an opinion piece published by China’s state broadcaster on Saturday, Chinese legal expert Kong Qingjiang said China’s entity list would mimic that of the US.

Once a foreign firm is added to the list “all goods, services, technology, and software covered by (China’s commerce ministry) will then require a licence to be sold to the entity.”

“It may serve as a useful tool in dealing with those entities that easily bow to the pressure of foreign governments hostile to China,” Kong wrote.

First in line to be added to the list will be Huawei partners that cut off supplies, experts said.

“Obviously it’s mostly aimed at Huawei suppliers, Intel, Qualcomm, ARM...if anything it’s probably aimed at non-US companies, so European, South Korean and Japanese companies that may be trying to decide how strictly to apply the US ruling,” said Andrew Polk, an economist at Trivium China.

China wants to make it a much more difficult choice to cut off supplies to Huawei, he added.

“It’s potentially putting companies in a situation where they are forced to choose between the US and China and that could definitely backfire on them,” said Polk.

China’s state-owned tabloid the Global Times said the new list would “work as deterrent forming a protective barrier around Chinese companies”.

Published in Dawn, June 2nd, 2019