Just hours after President Trump reportedly signed off on tariffs targeting some $50 billion in Chinese goods (a decision that was finalized after a 90-minute meeting with officials from the West Wing, as well as senior national-security officials, the Treasury Department, the Commerce Department and the office of the US Trade Representative), Chinese Foreign Minister Wang Yi said during a press conference in Beijing that China is prepared to retaliate as it takes a more confrontational approach against the US on trade, according to the Wall Street Journal.
Wang’s comments reportedly followed face-to-face talks with Secretary of State Mike Pompeo, where Wang urged Pompeo to choose a path of “cooperation and mutual benefit.” Pompeo was in Beijing to brief Chinese officials on the North Korea summit.
On Thursday, Chinese Foreign Minister Wang Yi said China and the U.S. faced a choice between cooperation and mutual benefit on the one side and confrontation and mutual loss on the other.
“China chooses the first,” Mr. Wang told a joint news conference, after talks with U.S. Secretary of State Mike Pompeo in Beijing.
“We hope the U.S. side can also make the same wise choice,” Mr. Wang said. “Of course, we have also made preparations to respond to the second kind of choice.”
Meanwhile, Bloomberg reports that Mei Xinyu, a researcher at Chinese Academy of International Trade and Economic Cooperation, part of China’s Ministry of Commerce, expects China to adopt retaliatory tariffs on U.S. goods “immediately.”
While the official breakdown of Trump’s tariffs won’t be released until tomorrow, a CNBC source noted that Trump has already signed off on the tariffs, and that a list of talking points has been distributed to 10 government agencies, while a list of products has been uploaded to a government database.
As we noted earlier, one factor that could sway Trump’s thinking on tariffs would be an aggressive response from China. Earlier on Thursday, Xinhua, China’s state news agency reported that President Xi Jinping had told Pompeo that he hopes the US will tread carefully when it comes to sensitive issues like the US’s relationship with Taiwan and the simmering trade conflict so as to avoid a serious breakdown in bilateral ties between the two countries (ties that, aside from the trade spat, are also being tested by military brinksmanship in the Pacific).
The list of goods that will be subject to the new levies is expected to include between 800 and 900 products, slightly less than the original list of about 1,300 products on a list published by the US Trade Representative in April, as we pointed out earlier, While the two countries have been exchanging trade-related threats for months now, it’s still unclear when the US tariffs will go into effect.
But remember, this is not a ‘Trade War’ – heaven forbid… the narrative that these shots and retaliations are merely skirmishes (because what would stocks do if they really started thinking a trade war was possible). One can’t help but picture the Black Knight defending his bridge…one “fleshwound” at a time…
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