China’s state-run media says the U.S. put trade talks at risk and the Trump administration demonstrated “bullying behavior” in escalating the trade war further, sending Wall Street into yet another tailspin in pre-market trading on Friday.
“The two sides had open and constructive communication during the 11th round of the China-U.S. high-level economic and trade consultations,” spokesperson Gao Feng said. “However, it is regrettable that the U.S. side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks.”
The world’s two largest economies have been locked into a trade war for more than a year now, with both sides levying tariffs on the other. Last week, U.S. President Donald Trump raised tariffs on $200 billion worth of Chinese goods from 10% to 25%, and Beijing retaliated with 25% tariffs on $60 billion worth of U.S. goods.
Trump then said he has a list of about $300 billion more in Chinese imports to slap with tariffs, which would effectively place tariffs on almost everything China exports to the U.S., further escalating the powder keg.
China says it will be forced to respond.
“China always believes that raising tariffs is not a solution to the trade frictions,” said Gao, adding that China will be forced to retaliate. “We urge the U.S. side to correct wrongdoings as soon as possible to avoid causing heavier damages to businesses and consumers in both countries and dragging down the global economy.”
The news sent the markets tumbling before the opening bell Friday. The S&P 500 and Dow both sank 0.8%, and the Nasdaq was down 1.1%.
Former commerce ministry Zhou Xiaoming said the U.S. must make concessions for talks to move forward, according to Bloomberg.
“If the U.S. doesn’t make concessions in key issues, there is little point for China to resume talks,” he said. “China’s stance has become more hard-line and it’s in no rush for a deal” because the U.S. approach is extremely repellent and China has no illusions about U.S. sincerity, he said.
According to Zhou, talks in the near future have been ruled out and there are three major concerns that need to be addressed. He also added that recent escalation by Washington has “seriously hurt” talks.
Chinese state-run media has been ramping up the propaganda of late, accusing the U.S. of “little tricks to disrupt the atmosphere,” according to recent commentary from Taoran notes blog, pointing to the Trump administration’s ban of Huawei from U.S. networks via executive order on Wednesday.
“We can’t see the U.S. has any substantial sincerity in pushing forward the talks. Rather, it is expanding extreme pressure,” the blog wrote. “If the U.S. ignores the will of the Chinese people, then it probably won’t get an effective response from the Chinese side.”
The Taoran blog notes three main concerns for China: removal of all tariffs, achievable purchase plans and a balanced agreement.
“If anyone thinks the Chinese side is just bluffing, that will be the most significant misjudgment” since the Korean War, it said.