China accused the U.S. of launching “the largest
trade war in economic history,” forcing the country to counterattack.
In a statement issued minutes after the U.S.’s
July Sixth deadline for imposing 25 per cent tariffs on 34 billion US Dollars
in Chinese products, China’s Commerce Ministry said that Beijing “will not fire
the first shot, but in order to safeguard the country’s core interest and its
people’s interest, China is being forced to strike back as necessary according
to reports in the Chinese official media.
Though the statement didn’t explicitly say that
China’s retaliatory tariffs have taken effect, the foreign ministry confirmed
shortly thereafter that the levies had kicked in. Beijing’s tariffs match the
U.S.’s in value.
While the U.S. tariffs take aim at intermediate
industrial goods from machinery to auto parts and medical devices imported from
China, Beijing’s will hit U.S. farm products–like soybeans–as well as
American-made sport-utility vehicles.
China’s state-controlled media took a sharply
more critical tone in the hours leading up to and following the U.S. tariffs.
People’s Daily, the newspaper of the ruling Communist Party, said the U.S.,
creator of the postwar global trading system, is now trying to change the rules
to “sustain its first-mover advantage and ensure the global economic governance
system always evolves in a direction that benefits the U.S.”
Xinhua, the government news agency, predicted
that the U.S. “will be forced to return to its senses”–after paying “a terrible
price.” China, it said, “stands on the moral high ground.”
Chinese officials also sought to play down the
tariffs’ potential impact on the country’s 12 trillion US Dollars economy..
Ma Jun, an economist and member of the central
bank’s monetary policy committee, forecast a hit to China’s economic growth of
just 0.2 percentage point, according to Xinhua. It quoted Mr. Ma as saying the
markets have already factored in the initial volley of tariffs.
In its statement, the Commerce Ministry said it
will report to the World Trade Organization and work with other countries to
protect the international free-trade system. Meanwhile, it said, the government
would take measures to assist companies affected by the trade conflict.