Experts: Fresh trade threats by US will not work

China won't give in to pressure by the United States on tariffs and will firmly defend its core interests, as it has sufficient countermeasures available, experts said.

The reaction came after the Ministry of Commerce expressed strong opposition on Saturday to a new threat of additional tariffs by the US on about $550 billion worth of Chinese imports. The ministry urged Washington to reverse course immediately or be prepared to "bear all the consequences".

The ministry said that China is "firmly opposed" to the US' "unilateral and bullying acts of trade protectionism and extreme pressure", and urged it to immediately stop its "erroneous practices".

On Sunday, the White House moved to clarify comments made at the G7 summit in France by US President Donald Trump, saying he meant to say he wished he had raised tariffs on Chinese goods even more last week.

Trump raised eyebrows on the sidelines of the G7 when he responded in the affirmative to questions from reporters on whether he had second thoughts about raising tariffs on Chinese goods by 5 percent.

Trump also signaled he did not plan to follow through with a demand that American companies find ways to close operations in China.

China Ministry of Commerce said that the latest tariff threat by the US violates the consensus reached between the countries' top leaders and severely undermines the multilateral trading system and normal international trade order, adding that Washington "will eat the bitter fruit of its own actions".

Gu Xueming, head of the ministry's Chinese Academy of International Trade and Economic Cooperation, said the pressure tactics will not work with China, which will "unswervingly protect itself".

Going forward, the country's countermeasures will be more rational, firmer and more powerful, Gu said at a seminar in Beijing on Sunday.

Gu said he hoped the US will see the situation clearly, "give up its illusions" and resolve its differences with China with mutual benefit and respect.

Bai Ming, a senior researcher at the academy, said China has sufficient tools to counter the US administration's unilateral tariff actions. The "quality" of the tools matters most, he said.

On Friday, the US administration said it will raise duties on $250 billion worth of Chinese goods from the current 25 percent to 30 percent beginning Oct 1, and on the remaining imports of $300 billion from the previously planned 10 percent, to 15 percent on Sept 1.

The move followed Beijing's plan Thursday to raise tariffs on $75 billion worth of US goods in response to the US' planned levies on an additional $300 billion worth of Chinese imports, announced earlier this month.

The US imported goods from China totaling $478.4 billion in 2018, according to China's General Administration of Customs.

"It is rational, as China did this to protect its own economic and social interests and safeguard its right of development, as well as to defend multilateralism and economic globalization," said Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics. "The move is also powerful because additional tariffs on certain US products, like soybeans and oil, hit the US where it really hurts."

Since the China-US trade dispute erupted about a year and a half ago, the world's two largest economies have slapped several rounds of import duties on each other.

US trade groups spoke out about the latest tariff escalation, and a couple of American business executives compared Trump's latest move to a 1930 law that increased tariffs, which they said contributed to the Great Depression.

"Enough is enough — as evidenced by Friday's 623-point drop in the Dow," said Gary Shapiro, president and CEO of the Consumer Technology Association in Arlington, Virginia.

"These escalating tariffs are the worst economic mistake since the Smoot-Hawley Tariff Act of 1930 – a decision that catapulted our country into the Great Depression. Instead of making America great again, the president is using tariffs to make a great economic mistake – again," Shapiro said in a statement.

"How much longer will our families, companies and economy be forced to bear the financial burden of this misguided trade policy?" he asked.

Rick Helfenbein, CEO of the American Apparel & Footwear Association, said businesses are being subjected to "a 1930s trade strategy".

"Meanwhile, the president has said he wants American businesses to stop working in China, yet he doesn't seem to understand that moving a supply chain is incredibly complicated and expensive," Helfenbein said, referring to Trump's tweet Friday in which he "hereby ordered" US companies to seek alternatives to doing business in China.

At the G7 on Sunday, Trump softened that remark: "I have no plan right now (to order US companies out of China). Actually, we're getting along very well with China right now. We're talking," Trump said.

"President Xi is still his friend," US Treasury Secretary Steve Mnuchin said Sunday. "But as it relates to financial issues and trade, we have become enemies. We're not making progress."

Myron Brilliant, executive vice-president and head of international affairs for the US Chamber of Commerce, said that the 40-year trade relationship between the US and China has been for the most part "productive, constructive, and mutually beneficial".

"While we share the president's frustration, we believe that continued, constructive engagement is the right way forward. Time is of the essence. We do not want to see a further deterioration of US-China relations," Brilliant said.

Farmers for Free Trade said in a statement that the rapid evaporation of the Chinese market has for the first time in more than four decades "brought us to the brink of losing our agriculture trade surplus with the rest of the world".

Chinese companies halted purchases of US farm produce early this month when the US planned to impose additional 10 percent tariffs on $300 billion worth of Chinese imports, which violated the consensus reached by the two heads of state in Osaka, Japan, at the end of July.

"While American farmers are on the sidelines, farmers in Brazil, Canada and Russia are reaping the benefits of the administration's trade policy decisions," it said. "Farmers want a win, not a war."

Reuters contributed to this story.