- The Washington Times - Tuesday, July 3, 2018

China won’t hesitate to retaliate against U.S. tariffs and escalate a trade war with Washington if tensions over economic negotiations with the Trump administration continue to rise, the foreign ministry in Beijing said Tuesday.

The Chinese government is “fully prepared to take a package of necessary measures” to safeguard its national interests if a full-blown trade war breaks out between the world’s two biggest economies, said foreign ministry spokesman Lu Kang.

He made the assertion to reporters in Beijing amid uncertainty in the Chinese capital around President’s Trump’s threat to begin imposing on Friday some $34 billion in tariffs on imports from China to the United States as part of the administration’s push to address a U.S.-China trade deficit that has soared in recent years.

Mr. Kang, whose comments were reported by The Associated Press, was apparently referring to a counter-threat Beijing has already made to retaliate with equal tariffs worth $34 billion against U.S. goods bound for China.

Beijing and Washington have held repeated rounds of high-level trade talks since early May but have so far failed to address Mr. Trump’s impatience to reduce the $376 billion U.S. trade deficit that the administration says is unfairly benefiting China in the global economy.

The threat of ramping up tariffs has undergirded the president’s wider promise to make products manufactured in the United States more competitive in the world market.

The Associated Press, however, maintained Tuesday that U.S. companies ranging from soybean farms to whiskey distilleries to automakers such as Ford and Tesla could suffer if China follows through on its promise to retaliate with increased tariffs of its own.

Beijing has circulated a list of products that could be hit by the Chinese tariffs — an inventory of goods apparently designed to inflict maximum pain on U.S. farmers and other groups key to Mr. Trump’s domestic political base.

The U.S. tariffs, meanwhile, are likely to ensnare some major Chinese companies, including the state-owned telecommunications monopoly China Mobil. The Trump administration has bolstered its threat of tariffs by also warning that licenses for China Mobil to access the U.S. market could be blocked for national security reasons.

With China’s stock market having already fallen nearly 10 percent in recent weeks amid fears of a trade war, Mr. Lu on Tuesday characterized the administration’s warnings as “unfounded.” He also accused Washington of engaging in “an irrational clampdown.”

“We hope the U.S. will provide a level-playing field for Chinese companies’ investment and operation in the U.S. and do something conducive to the mutual trust,” the Chinese foreign ministry spokesman said, AP reported.

The friction on trade has been playing out against a backdrop in which the Trump administration is simultaneously relying on Beijing to help pressure North Korea into giving up its nuclear weapons.

Concerns are mounting in Washington that China — North Korea’s main economic a political ally — may take behind-the-scenes action to sully Mr. Trump’s push for follow-through on the denuclearization deal he struck with Pyongyang in Singapore last month.

China, which has positioned itself as the go-to partner in Washington’s “maximum pressure” sanctions campaign against North Korea during recent years, may seek to exploit its influence over Pyongyang as leverage to try to gain tariff concessions from Mr. Trump.

The two issues until have, until now, developed along separate tracks, with the administration crediting Beijing’s implementation of biting U.N. sanctions against Pyongyang with driving North Korea to the bargaining table.

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