China responds with tariffs on goods worth 60 billion US dollars

* China pledges to raise tariff rates if US moves up with higher rates in January

* New Chinese tariffs applied to 5,207 US products, including agricultural products, machinery and chemicals

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The new US tariffs on Chinese exports have exacerbated the countries' trade struggle, with Chinese officials trying to retaliate and accept Washington's offer for further negotiations.

After President Trump announced new tariffs on Chinese products worth $ 200 billion, Chinese Vice Premier Liu He met Tuesday with his senior lieutenants to find an answer, officials said. The order of the day was whether Mr. Liu or lower-ranking officials should travel to Washington for a new round of trade talks.

The Chinese Ministry of Commerce, in a brief statement at noon, said the US tariffs are creating "new uncertainty" for the talks and promised China would retaliate. It is unclear whether China could go ahead with a $ 60 billion pricing threat of US products.

Beijing's more discreet response reflects the dilemma faced by Chinese leaders as the world's two largest economies come closer to an unprecedented trade war. President Xi Jinping has put his popularity and reputation as a strong man in the limelight by turning China into a world power and can not afford to back down, ordering officials to stand firm and postpone negotiations.

On the other hand, worried that the skyrocketing trade could hurt an already weak economy and derail China, Xi also ordered his officials to continue to dialogue with Washington and business. US.

President Trump focused on Beijing on Monday, first of all by saying that the new 10% tariff on $ 200 billion worth of Chinese products would come into effect in just one week. Then he reiterated a threat to hit another $ 267 billion in Chinese imports with tariffs if Beijing retaliates. With products already subject to punitive taxes, the total would exceed $ 505 billion worth of Chinese goods imported by the United States last year.

Given that China imports much less US goods – just under $ 130 billion last year – Beijing lacks products to penalize.

"The United States is at the helm," said a Chinese official.

President Trump first threatened the $ 200 billion tariff cycle in July. While companies have had more than two months to digest this eventuality, the escalation has continued to cause tension. Business leaders, including the titan of e-commerce, Jack Ma, have taken the new tariffs as a sign that trade tensions are not going to dissipate quickly.

The new US tariffs will affect a wide range of products used by businesses and consumers, from auto parts to luggage. Business representatives cautioned that this is a particular problem for companies whose global supply chains depend on China.

"On a strategic level, I think they should have a plan B," said Carlo Diego D'Andrea, president of the Shanghai Heavy Manufacturing Section of the European Chamber of Commerce in China. While in previous episodes of US-Chinese trade, European companies could hope to win orders at the expense of US companies, this time they expect to be caught between two fires, according to a survey conducted by the European Chamber of Commerce. member companies.

In recent days, as new US tariffs loomed on the horizon, Chinese officials and government advisers wondered whether it was time to negotiate with the Trump administration.

Deputy Prime Minister Liu met with other senior economic officials on Tuesday to discuss Secretary of Treasury Steven Mnuchin's invitation last week to continue talks in Washington, officials said.

Accepting the US invitation would run counter to Beijing's public position that it will not trade under arms fire, officials said, while the decline could worsen tensions .

One option, according to officials, is to send a lower-ranking sales manager, Vice Minister of Commerce Wang Shouwen, for talks this month while sparing Mr. Liu. As part of the initial plan, smaller talks were expected this week before Liu's trip to Washington next week. Last Tuesday, no final decision was made on the issue, according to officials.

An ally of Mr. Liu escaped Tuesday from Washington's pressure. "Negotiations can not be conducted with this type of tactic," said Fang Xinghai, vice chairman of the China Securities Regulatory Commission, at a meeting of the World Economic Forum in the coastal city of Tianjin.

"It can work with a small country," he said. "It does not work with China." The new US tariffs, he said, have "poisoned the atmosphere for negotiations".

Voices have been raised in Chinese political circles in recent weeks, saying Beijing should wait to negotiate before the mid-November elections. Many Chinese officials believe that President Trump is not ready to reach an agreement, he is now attacking China to appeal to his political base and may be more willing to negotiate after the elections.

US goods worth $ 60 billion were declared last month with retaliatory rights of 5 to 25%, including agricultural products, machinery and chemicals. Taxes, if applied, would add to the $ 50 billion tariff on US products already in effect, bringing the total amount of US products subject to Chinese tariffs to $ 110 billion, or $ 85 billion. % of US products entering China last year. , according to US statistics.

Some Chinese officials advising executives suggest restricting China's sales of materials, equipment, and other parts to US manufacturers' supply chains. If adopted, such a move could hurt companies like Apple Inc., which assembles most of its gadgets in China, but also millions of Chinese jobs.

Many US companies operating in China are increasingly concerned about Chinese retaliation. In addition to tariffs, more than half of the member firms surveyed by the US Chamber of Commerce in China earlier this month reported seeing an increase in non-tariff barriers in recent months, including increased inspections and customs clearance. slower.

"Contrary to Washington's view, China can – and will – widen its heels and we are not optimistic about the prospect of a short-term resolution," said William Zarit, a consultant on Tuesday. business and president of the chamber.

-Chao Deng in Tianjin and James T. Areddy in Shanghai contributed to this article.

Write to Linling Wei at [email protected]