China on Thursday threatened to take “necessary countermeasures” if the U.S. goes forward with $300 billion in planned tariffs on Chinese goods, saying the levies violated an agreement reached earlier this year by President Trump and Chinese President Xi Jinping.
The Chinese State Council Tariff Committee said in a brief statement Thursday that the 10 percent tariffs that were originally slated to take effect Sept. 1 “violated the consensus between the heads of state of the two countries” and warned that China “will have to take the necessary countermeasures.”
{mosads}The warning follows the Office of the U.S. Trade Representative’s decision to delay the tariffs on some Chinese goods and exempt others from a new round of import taxes.
China announced earlier this month it would halt its purchases of U.S. agricultural goods and allow its currency to weaken after President Trump first introduced the new tariffs.
Economists at Bank of America, Goldman Sachs and Moody’s Analytics warned earlier this week that the ongoing trade war was partially responsible for raising the prospects of a recession before the 2020 election.
The Dow Jones Industrial Average, S&P 500 and the Nasdaq composite all dropped more than 1 percent as trading opened Wednesday.
The decision to delay the tariffs came amid fears their imposition would hurt the U.S. economy and consumers and businesses in the coming holiday season. Trump tweeted Wednesday that China’s devaluation of its currency was preventing U.S. tariffs from hurting the Chinese economy, and that U.S. consumers would be fine regardless of whether the new U.S. tariffs were imposed — though he added it would be better to delay the tariffs.
“They are eating the Tariffs with the devaluation of their currency and ‘pouring’ money into their system,” he tweeted Wednesday. “The American consumer is fine with or without the September date, but much good will come from the short deferral to December.”
China’s threat of retaliation came just hours after Trump offered to have a personal meeting with Xi to discuss the ongoing violent protests in Hong Kong.