China vows to take trade fight to Trump

China says it's ready to fight the US on trade in response to President Trump's latest tariffs.
China says it's ready to fight the US on trade in response to President Trump's latest tariffs.

China has vowed to fight back against US President Donald Trump's abrupt decision to slap 10 per cent tariffs on the remaining $US300 billion ($A442 billion) in Chinese imports, a move that has ended a month-long trade truce.

China's new ambassador to the United Nations, Zhang Jun, said Beijing would take "necessary countermeasures" to protect its rights and bluntly described Trump's move as "an irrational, irresponsible act".

"China's position is very clear that if US wishes to talk, then we will talk, if they want to fight, then we will fight," Zhang told reporters in New York, also signalling that trade tensions could hurt cooperation between the countries on dealing with North Korea.

Trump said on Friday China has to do a lot in order to turn things around in trade negotiations with the US and that he can increase tariffs on Chinese goods.

Trump, speaking to reporters at the White House, said the US had to have a better trade deal with China, not just an even deal.

Trump stunned financial markets on Thursday by saying he plans to levy the additional duties starting September 1, marking a sudden end to a truce in a year-long trade war between the world's two biggest economies that has slowed global growth and disrupted supply chains.

Earlier on Friday, Chinese foreign ministry spokeswoman Hua Chunying said China was holding firm to its position in the 13-month tariff brawl with the US.

"We won't accept any maximum pressure, intimidation or blackmail," Hua told a news briefing in Beijing.

"On the major issues of principle we won't give an inch," she said, adding that China hoped the US would "give up its illusions" and return to negotiations based on mutual respect and equality.

Retaliatory measures by China could include tariffs, a ban on the export of rare earths that are used in everything from military equipment to consumer electronics, and penalties against US companies in China, according to analysts.

Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal.

The 10 per cent duties, which Trump announced in a series of Twitter posts after his top trade negotiators briefed him on a lack of progress in talks in Shanghai this week, would extend tariffs to nearly all Chinese goods that the US imports.

White House economic adviser Larry Kudlow told reporters on Friday that the impact on consumers from the latest duties would be minimal, despite the fact that the $US300 billion target list is nearly all consumer goods, from mobile phones and laptop computers to toys and footwear.

"The president's not satisfied with the progress on the trade deal," Kudlow told Fox Business Network.

So far, Beijing has refrained from slapping tariffs on US crude oil and big aircraft, after cumulatively imposing additional retaliatory tariffs of up to 25 per cent on about $US110 billion of US goods since the trade war broke out last year.

China is also drafting a list of "unreliable entities" - foreign firms that have harmed Chinese interests. US delivery giant FedEx is under investigation by China.

"China will deliver each retaliation methodically, and deliberately, one by one," ING economist Iris Pang wrote in a note.

"We believe China's strategy in this trade war escalation will be to slow down the pace of negotiation and tit-for-tat retaliation. This could lengthen the process of retaliation until the upcoming US presidential election" in November 2020, Pang said.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin briefed Trump earlier this week on their first face-to-face meeting with Chinese officials since Trump met Xi at the G20 summit at the end of June and agreed to a ceasefire in the trade war.

Previous negotiations collapsed in May, when US officials accused China of backing away from earlier commitments.

Australian Associated Press