China Pledges Retaliation as US-Threatens 100% Tariffs on All Chinese Goods

Strategic Insights -

Amidst a worsening trade dispute, China has vowed to retaliate if the US goes ahead with a planned tariff hike, while new data shows Chinese exports to the US dropped 27% in September. Beijing has accused the US of abusing tariffs and disrupting the global trade order, as the world's two largest economies edge closer to a full-blown trade war. Chinese President Xi Jinping and US President Donald Trump are set to meet in South Korea later this month, but tensions remain high.

Key Takeaways:

  • China has pledged to take retaliatory measures if the US imposes 100% tariffs on all Chinese goods, with Foreign Ministry spokesperson Lin Jian stating that the country will resolutely safeguard its legitimate rights and interests.
  • China's exports to the US dropped 27% in September, falling to $34 billion, while overall export numbers grew 8% year-on-year.
  • The US has threatened to impose an additional 100% duty on Chinese goods, citing concerns over Chinese restrictions on raw materials used to make computer chips and defense technologies.
  • Beijing has expanded export restrictions on critical raw materials used to make computer chips and defense technologies, prompting Trump to threaten another round of tariffs.
  • China accounts for 90% of the global processing of rare earths, and has tightened export controls on these chemically unique metals.
  • Trump has softened his tone, stating that his planned meeting with Xi at the Asia-Pacific Economic Cooperation forum will be "fine," but analysts warn that tensions remain high.

Statistics:

  • China's exports to the US dropped 27% in September to $34 billion.
  • China's overall export numbers grew 8% year-on-year in September.
  • The US has threatened to impose an additional 100% duty on Chinese goods, worth an estimated $112 billion.
  • China accounts for 90% of the global processing of rare earths.
  • New export restrictions on rare earths and related products will require foreign entities to apply for licenses from Beijing.

Sources:

  • Christian Shepherd, Lyric Li, "China vows to hit back at Trump's tariff threat", The Financial Times, October [no date provided]
  • Beijing's Ministry of Commerce statement, "China firmly opposes US plan to impose 100% tariffs on Chinese goods", [no date provided]
  • Lu Daliang, spokesperson for China's customs agency, Beijing Foreign Ministry, [no date provided]
  • Julian Evans-Pritchard, Capital Economics, [no date provided]