Latest tariff on $300 billion to face retaliation

Commerce Ministry urges Washington to correct its mistakes in timely manner

China strongly opposes a new tariff proposal from the United States targeting $300 billion worth of Chinese imports, and vowed to take necessary countermeasures if the move is implemented, ministry officials said on Friday.

Shortly after the 12th round of bilateral trade talks in Shanghai, the US government said on Thursday that it would impose an additional 10 percent tariff on $300 billion worth of Chinese goods starting Sept 1. The plan will put additional tariffs on basically all Chinese goods coming into the US, but medicines will not be affected.

The Ministry of Commerce said in a statement that China is "strongly dissatisfied with and resolutely opposed to" the US tariff proposal. The US plan seriously violates the consensus reached between the heads of the two countries in Japan, deviates from the right track and won't help solve the problem, it said.

The country will have to take necessary countermeasures if the US tariffs come into force, the ministry said, urging the US to correct its mistakes in a timely manner, address the issues on the basis of equality and mutual respect and get back on the right track.

State Councilor and Foreign Minister Wang Yi told reporters in Bangkok on Friday that unilaterally imposing additional tariffs is surely not a proper approach for resolving economic and trade issues, and it violates WTO rules.

Foreign Ministry spokeswoman Hua Chunying said at a news conference that China will not accept any kind of extreme pressure, intimidation or blackmail. Neither will China give in an inch on major issues of principle, Hua said.

Now it's time for Washington to show sincerity and demonstrate to the world that the US is still a reliable partner that can carry out negotiations, she added.

The US announcement of a new tariff plan comes just two days after top negotiators wrapped up their "constructive" talks in Shanghai. In the meeting, both sides confirmed the next round of talks would take place in September in the US, according to Commerce Ministry spokesman Gao Feng.

However, the sudden appearance of the new US tariff proposal caught some experts by surprise and led to greater turmoil in the stock market.

"We're concerned that today's action will drive the Chinese from the negotiating table, reducing hopes raised by (the) talks that ended this week in Shanghai," US-China Business Council President Craig Allen said in a statement.

"We're concerned these additional tariffs will further erode our reputation as a reliable supplier, and our farmers, workers and consumers will suffer more," he said.

Yang Weiyong, an economics professor at the University of International Business and Economics in Beijing, said the US tariff plan wont' help the two countries to come to a resolution. "Instead, it will only cause the efforts that both sides made in the prior talks to be in vain," Yang said.

Doug Barry, director of communications for the US-China Business Council, said, " (The new tariff proposal) is certainly detrimental to the timely conclusion of trade negotiations that have been underway for a year."

"It seems like it will potentially sidetrack progress that has been made, especially since the negotiators were busy up until Wednesday in Shanghai and had scheduled another meeting for early September."

Helana Natt, executive director at the Greater New York Chamber of Commerce, said the persistent squabbling between the US and China hurts consumers.

"They (top leaders of both countries) need to sit down at the table as soon as possible because this back-and-forth yo-yo approach is hurting consumers and businesses," she said.

The Dow Jones Industrial Average had rebounded more than 300 points in intraday trading from Wednesday's substantial decline, but closed down 280.85 points or 1.05 percent Thursday, to 26,583.42.

A Deutsche Bank report predicted the market fluctuation will continue in the second half of the year, affected by slowing economic growth, falling corporate profits and China-US trade negotiations. It will take time for China and the US to reach an agreement, it said.

Hua Changchun, an analyst with Guotai Junan Securities, said the biggest impact of the US planned new tariffs on the US will be inflation, and it will cause urgent need for the US to find new sources of good suppliers.

The tariff plan's biggest influence on China is that the country's participation in the global industrial chain will be further disrupted, Hua said in a research study on Friday.

JING SHUIYU and ZHONG NAN in Beijing, ZHANG YUNBI in Bangkok

Mo Jingxi in Beijing, Scott Reeves and Belinda Robinson in New York contributed to this story