US Faces Accusations of Hypocrisy from China Over Tariff Threats
The government of China has hit back at the recent threat by the United States to double tariffs on Chinese imports, labeling it as a stark example of American hypocrisy. In addition to this, China hinted at the possibility of implementing its own undefined "countermeasures" should the US go ahead with this threat, expressing their lack of fear towards a potential trade war.
Increasing Tensions
Recently, the US criticized China's decision to tighten export regulations on rare earths, a group of 17 minerals used in a wide range of products, from smartphones to solar panels. The President of the United States accused China of growing aggression and attempting to monopolize the world's supply of these critical resources.
Further intensifying these tensions, the President threatened to cancel a planned meeting with China's President. Following these comments, the financial markets showed signs of instability, with a significant stock index experiencing a 2.7% drop, marking its most substantial decrease since April. These statements have reignited concerns over a potential trade war between the two largest economies in the world.
Previous Agreements in Jeopardy
Earlier this year, both countries had agreed to abandon steep tariffs on each other's products, offering a glimmer of hope for the resumption of trade activities. After this agreement, American imports from China were subject to an additional 30% levy from the beginning of the year, while Chinese imports from the US were taxed at 10%.
China's most recent statements mirror the rhetoric used during the height of the trade dispute. The Chinese government defended its export controls on rare earths as necessary steps for national security. It also criticized US export restrictions on chips and semi-conductors, accusing the US of abusing export control measures and implementing discriminatory practices against China for a prolonged period.
China's Stance on Tariff Threats
A spokesperson from China stated, "Applying threats of tariffs is not an appropriate approach to engage with China." They reaffirmed China's consistent position on a tariff war: while they don't desire it, they aren't scared of it.
Last week, China announced tighter export controls over rare earths and other materials crucial for high-tech manufacturing. This move is seen as significant, considering China handles about 90% of the global processing of rare earths.
Uncertain Future
The recent exchange of words between the US and China is seen by some as an attempt to fortify their positions ahead of upcoming trade negotiations. It remains uncertain whether the expected meeting between the Presidents of the US and China, slated to take place at a summit in South Korea, will occur.