Donald Trump and Xi Jinping at the G20 summit, 2017, Photo: Xinhua
The global economy is once again on the brink of a major trade conflict. China reacted harshly to US President Donald Trump’s decision to impose new duties on Chinese goods, threatening Washington with “any kind of war”.
“If the United States wants a war – trade, customs or any other – we are ready to fight to the end,” the Chinese embassy in Washington said, quoting the government’s official position.
Trade conflict escalates
- The US imposed new duties on Chinese products.
- In response, China imposed a tax of up to 15% on American agricultural goods.
- Beijing accused Washington of “blackmail and pressure”.
The Chinese government’s message is considered to be the toughest ever since Trump returned to the White House. It was delivered during the National People’s Congress, a key political event in Beijing.
China increases its military budget
Amid the escalation of the conflict, China is increasing defence spending by 7.2%.
Premier of the State Council of the People’s Republic of China Li Qiang said that the world is entering a “period of unprecedented change” that requires strengthening the army. China’s military budget is the second largest in the world after the United States. Western experts suspect that Beijing is underreporting its real defence spending.
Diplomatic war and fentanyl accusations
The new round of tension between the two countries is not just about tariffs. China has rejected Washington’s accusations that it is allegedly facilitating the spread of fentanyl, a dangerous drug that has caused a crisis in the United States.
“Your tariffs are just a pretext. We cannot be intimidated, blackmail will not work,” the Chinese Foreign Ministry said.
Is de-escalation possible?
Before Trump’s inauguration, Beijing expected a “new start” in relations – the leaders even had a phone conversation. However, tensions are now rising, and the economic standoff risks escalating into a political crisis.
Whether Washington and Beijing will be able to reach an agreement, or whether the world is on the verge of a new global trade conflict, will become clear in the coming weeks.
