Beijing’s countermeasures will be an important factor in determining future relations between the world’s two largest economies. | AP Photo China angry over Trump’s latest tariff threats but gives no clues about countermeasures

This story is being published for POLITICO as part of a content partnership with the South China Morning Post. It originally appeared on scmp.com on June 21, 2018.

China’s commerce ministry on Thursday accused Washington of being “protectionist” and “blackmailing” by threatening to impose further tariffs on Chinese products, but the ministry declined to specify how Beijing will respond.


Ministry spokesman Gao Feng said in Beijing that the United States had abused its import tariffs system and had started trade wars in various parts of the world to “seriously undermine the world trade order and harm the interests of its trading partners”. Washington’s allegation of China stealing its technology “is a serious distortion of history and reality” and the U.S. was picking China as a “scapegoat” for its own problems, he said.

Gao was responding to President Donald Trump’s latest threat to hit $200 billion worth of Chinese imports with 10 percent tariffs if Beijing retaliates against his previous announcement to target $50 billion in imports, and to target another $200 billion worth of Chinese products if Beijing chooses to fight back. If it makes good on its threats, U.S. actions could affect as much as $450 billion worth of Chinese imports.

However, Gao didn’t give details on what specific retaliatory measures the Chinese government will adopt against the fresh threats.

He repeated what the ministry said on Tuesday, that China would take forceful “qualitative and quantitative” countermeasures.

“China has made full preparations ... to defend the interests of the nation and the people,” Gao said.

Observers speculated that Beijing could move to restrict U.S. investment in China and tell Chinese companies not to do business with American firms.

China was likely to use “more underhanded and damaging forms of retaliation such as instructions to Chinese companies and consumers to channel their business away from American companies, which also includes services and goods”, said James Zimmerman, a partner in the Beijing office of law firm Perkins Coie.

Beijing’s countermeasures will be an important factor in determining future relations between the world’s two largest economies. Any efforts by Beijing to inflict pain on U.S. businesses might also tarnish the pro-business and pro-open-door image that the Chinese government is trying very hard to present to the outside world.

Gao said China’s decision to impose tariffs on certain U.S. cars was in line with Chinese law and international practices and was not against China’s broad strategy of boosting imports.

While the spokesman accused the U.S. of being temperamental in trade talks, he also tried to woo U.S. businesses.

“China will continue to expand its market opening. The first China International Import Expo will be held this November to allow all countries to share China’s opportunities,” Gao said.

“We hope the U.S. [government] will respond to the calls of the Chinese and U.S. industry ... not to miss the express train of China’s rapid development.”