Business Insider
- A senior Chinese official has described dealing with the United States on trade as akin to negotiating with "a knife to China's neck".
- The remark follows a string of inflammatory remarks from Chinese policymakers following the introduction of new tariffs on Chinese imports from the United States on Monday.
- The Commonwealth Bank of Australia expects the US will eventually apply 25% on tariffs on all Chinese imports beginning either late this year or early 2019.
Trying to deal with the United States on trade is akin to negotiating with "a knife to China's neck", says Wang Shouwen, China's Vice Commerce Minister.
According to Reuters, Wang made the remark at a press conference on Tuesday, suggesting it was difficult to proceed with trade talks given the current set of circumstances.
Wang said that if and when talks restart would depend on the "will" of the United States, suggesting a solution can be found if both sides show sincerity with negotiations on an equal footing.
However, he added that given the current divide between the two sides, the risk of a trade war is "rising".
On the decision to abandon trade talks late last week, Wang said the United States had "abandoned mutual understandings", making it difficult to move forward.
"China does not know why the United States has changed its mind after reaching an agreement with China on trade earlier," Wang said.
The remarks followed the publication of a white paper from China's State Council earlier this week that described recent US actions as "trade bullyism".
Adding further to tensions, China's state-backed Global Times newspaper said on Tuesday that conflict with China would "come at a huge price".
"China is a big and powerful nation, so whether it is a confrontation with China economically or militarily, it would come at a huge price," the editorial said.
"As such, it is an attractive prospect for other countries, including the United States, to coexist with China peacefully."
On Monday, the US introduced new 10% tariffs on $200 billion worth of Chinese imports. In response, China retaliated, slapping tariffs on $60 billion worth of US goods entering the country.
Earlier this month, strategists at the Commonwealth Bank of Australia warned the US could eventually apply 25% tariffs on all Chinese imports, totalling over $500 billion per annum, resulting in a 0.4 percentage point hit to Chinese GDP growth should such an outcome eventuate.
"It is very likely President Trump will announce the process for applying tariffs on the remainder of its goods imports from China in coming weeks with implementation in late 2018 or early 2019," the bank said.