Call Wake Up UK on 0208 191 9038

China: Instant retaliation if US proceeds with new tariffs



Beijing has refused to sit idle if Washington hits $300 billion worth of Chinese imports with additional 10 percent levies, calling the decision a violation of agreements reached by presidents Donald Trump and Xi Jinping.

“The Chinese side will have to implement necessary counter-measures,” the State Council Tariff Committee said in a short statement on Thursday. The body did not elaborate on what steps it is going to take.

European stocks turned red after Beijing’s threat with Britain’s FTSE 100 Index losing 1.1 percent and the Stoxx Europe 600 down 0.8 percent. Germany’s DAX weakened 1.23 percent, while France’s CAC 40 fell nearly 1 percent.

Meanwhile, American markets also indicated deeper losses less than 24 hours after the Dow Jones Industrial Average suffered the worst day of the year on Wednesday. The massive selloff was triggered by a recession signal from the bond market, called inverted yield curve, when short-term bond rates are higher than long-term ones (in this case 2-year treasury bonds were higher than 10-year bonds).

On Thursday, Dow futures fell more than 160 points and S&P 500 futures dropped 0.7 percent while Nasdaq futures were down around 1.2 percent.

Washington has backtracked on President Trump’s threat to impose the latest tariffs on September 1. On Tuesday, the Office of the United States Trade Representative (USTR) announced that it is postponing additional tariffs on some Chinese imports, including toys and certain electronics, until December 15.

Some analysts have characterized the tariff delay as Trump having blinked in the trade war with China after the negative impact on the US markets. Trump justified the delay with the Christmas season to avoid the impact on American customers. The list of items that won’t targeted until mid-December includes Christmas festivities, Christmas tree lights and ornaments among others.

While Beijing did not disclose how it will retaliate against the new tariffs, China has reportedly halted purchases of US agricultural goods. When the levies come in force, China has several trump cards it can play such as using its vast foreign exchange reserves, that include $1.1 trillion in US Treasury securities, or the export of rare earth elements.

China’s $3.1 in trillion foreign exchange reserves can further allow Beijing to stay afloat and pay for its massive imports despite the yuan having fallen below the key level of 7 against the greenback.

While dumping US Treasuries is clearly a ‘nuclear option’ against the trade war rival, the move could also backfire on China. But Beijing has another, and much less painful, option to hit Washington, rare earths, which are necessary for producing various tech items, from batteries to military equipment. China accounts for more than 80 percent of the global supply of rare earths; most US exports of the vital elements come from China.


Get Connected!

Come and join the free speech community and get to know new people!

No comments yet

What is Wake Up UK?

A social network community where free speech is adored and political correctness is ignored!

A neutral platform where people can stand together in solidarity and work in partnership against all that threatens British culture, values, laws and way of life.


Use the website as a social network (similar to Facebook).

* Post, like, comment & share
* Send friend requests
* Message friends
* Join groups

VIP MEMBERSHIP – £3 per month
As above…..

PLUS 24/7 access to the VIP Member’s chatroom to watch the live stream shows each weekday evening from 6pm till late.

PLUS access the Live Show Archive to watch the 400+ archived live stream shows.

Latest Community Photos

Latest Community Videos

Latest Members