SINGAPORE (ICIS)--China will not move ahead with tit-for-tat import tariffs before Washington makes a move to impose them on Friday.
Because of the 12-hour time difference, it was widely expected that China will impose tariffs on $34bn of US goods ahead of Washington but the country’s Ministry of Finance on Wednesday said that it will not fire the first shot.
“The Chinese government has made it clear numerous times that we have to get prepared and once the US announces a tariff list, we’ll take the necessary measures to defend our legitimate rights,” the ministry said in a statement.
The US last month announced last month that it plans to slap a 25% tariff on Chinese goods worth $50bn.
It is set to import levies on 818 Chinese products worth $34bn a year on 6 July, but will not target the remaining 114 products worth $16bn from its plan until it gathers additional public comments.
China in response said it will impose a 25% tariff on 545 US products worth $34bn and is planning to impose the levy on an additional 114 US goods worth $16bn.
The US then further threatened to impose tariffs on additional $200bn worth of Chinese goods, which would likely trigger another round of retaliatory tariffs from Asia’s biggest economy.
Fitch Ratings earlier on Wednesday said that further tariff measures by the US would escalate risks to global trade and economic growth.
“The US investigation into auto tariffs, possible additional US tariffs on Chinese imports, and the likely reactions of other countries and blocs, point to a potential serious escalation, albeit with an impact that falls short of across-the-board tariffs imposed on all major trade flows,” Fitch said in a statement.
With trade tensions intensifying, players in the commodity markets have already moved on to avert potential risks.
Unipec, the trading arm of China’s biggest refiner Sinopec, has slowed down their purchase of US crude.
Chinese buyers are also looking to swap cargoes for US oil.
The World Trade Organization (WTO) on 4 July said that “the uncertainty created by a proliferation of trade restrictive actions could place economic recovery in jeopardy”.
“The marked increase in new trade restrictive measures among G20 economies should be of real concern to the international community,” WTO director general Roberto Azevedo said in a statement.
“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” he added.
With additional reporting by Nurluqman Suratman