China’s Tariff Rules Commission under the State Council announced on May 13 that China will further increase tariffs on US$6 million worth of US imports as of June 1.
The goods subject to the new tariffs are based on a list which China announced in September 2018 that would see increased tariffs of 5-10 percent. The latest increase further raises the rate on some commodities to up to 20-25 percent, mainly covering electronic parts and fiber optic cables and connectors.
According to the official statement, this increase was a riposte to the US’s May 9 announcement of increased tariffs on US$200 billion worth of Chinese imports from 10 to 25 percent effective May 10. The US’s announcement was unexpected as the Chinese delegation was about to arrive in Washington for the 11th round of trade talks. During the 10th round just a week before, US President Donald Trump told American media that an agreement was highly likely within four weeks.
According to Trump, his overnight change was due to China breaking some promises. Yet, China’s Ministry of Foreign Affairs denied his accusation, saying the US was attempting to pressure China to make compromises.
“To be frank, we still have some disputes with the US, and I think those disputes are all related to principle issues... We cannot make compromises on principles,” Chinese Vice-Premier and head of the Chinese delegation Liu He told media on May 10, adding that China is very sincere in its approach, and that agreement should be reached based on equality and dignity. China’s State-run Xinhua News Agency published a commentary on May 13, saying that Washington will do nothing but narrow the road of talks by continuing to pressure China, and that China will not shrink back before “winds and rains.”
The trade war was further fueled on May 15 when Trump issued an urgent administrative order banning US companies from using any equipment supplied by foreign companies that pose a risk to US security, a move widely believed to be targeting Chinese telecommunication giant Huawei. Following the order, Google announced it would suspend cooperation with Huawei and Microsoft reportedly removed Huawei laptops from its online store. In response, Huawei claimed that they have switched to a Plan B for domestically made chips and their self-developed Operating System is going to be released in the fall.
Tensions continued to escalate as the US blacklisted another 13 Chinese enterprises, and according to Bloomberg News, is considering banning five more engaged in monitoring equipment from buying US-made parts and technology.
Chinese State media China Central Television (CCTV) described the US’s array of moves as “technical bullying,” saying that China will turn the bullying into an opportunity to further develop China’s science and technology.
“Our door is still open... but China has to always defend the interests of the State and the Chinese people,” said Chinese ambassador to the US Cui Tiankai in an exclusive interview with Fox News on May 21.
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