Trade war: China says tit-for-tat US tariffs will ‘destroy’ trade between world’s top two economies

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China on Wednesday said that the tit-for-tat tariffs will ‘destroy’ trade between the top two economies of the world, US and China. In a ballooning trade war, Washington had fired the next shot, readying fresh levies on USD 200 billion in Chinese goods. “The outburst of large-scale mutual levying of tariffs between China and the United States will inevitably destroy Sino-US trade,” assistant minister of commerce Li Chenggang told a forum in Beijing.

US policy “actually interferes with the process of economic globalisation” and “damages the world economic order,” charged Li. “It is a chaotic time in international trade,” he added.

The US had imposed 25 per cent tariffs on around USD 34 billion in Chinese goods on Friday, which sparked an immediate dollar-for-dollar retaliation from Beijing. In a recent development, Washington on Wednesday announced that it was beginning the process to slap 10 per cent tariffs on another USD 200 billion in Chinese export goods as soon as September.

“Companies in both countries will suffer losses. There is no winner in a trade war. Cooperation is the only correct choice between China and the United States. It seems that the US is escalating the scale of this trade friction,” said Li.

“The negative impact of the trade friction has already appeared,” he added. Analysts have warned that a spiralling trade war between the world’s two financial powerhouses could have a damaging impact on the global economy.

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