Tariff hikes will backfire, and China can manage such ‘external shocks,’ a senior official says

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This article was published 22/11/2024 (378 days ago), so information in it may no longer be current.

HONG KONG (AP) — Higher tariffs on Chinese exports will backfire, just increasing prices paid by consumers, while China can manage to weather the impact of such “external shocks,” a senior Commerce Ministry official said Friday in Beijing.

Responding to a reporter’s question about U.S. President-elect Donald Trump’s plan to impose 60% tariffs on imports from China, Vice Commerce Minister Wang Shouwen said that would “not solve the country’s own trade deficit problem.”

“On the contrary, it pushes up the prices of the country’s imports from China and other countries,” Wang said during a news conference, noting that increased prices add to inflation.

China is willing to talk with the U.S. on a basis of mutual respect, for the benefit of both countries, Wang said.

“We believe that if China and the U.S. can maintain a stable, healthy, and sustainable development trend in economic and trade relations, it will be beneficial (to everyone),” he said.

Wang noted that China’s total foreign trade including imports and exports reached 36 trillion yuan (nearly $5 trillion) in January-October, up about 5% from the same period of 2023.

Despite the upbeat message, the threat of higher tariffs, following on increases during Trump’s first administration and additional hikes in import duties by the administration of President Joe Biden, threatens to add to Beijing’s woes as China’s ruling Communist Party struggles to revive growth and reverse a downturn in the property market and deal with mounting local government debts and high employment among Chinese youths.

A 60% duty on Chinese imports could shave off 2.5 percentage points, or about half, of China’s projected economic growth, according to an analysis published earlier this year by UBS.

During Friday’s news conference Wang and other officials outlined ways that China is promoting expanding trade and support for coping with climate change.

Such measures include streamlining customs and visa requirements. China allows visa-free travel for citizens of 29 countries, including France and Germany, and the number of foreign visitors, which plunged during the pandemic, has jumped this year.

Of the nearly 8.2 million foreign visitors in July-September, more than half entered using visa-free channels, said Tong Xuejun, an official with the Foreign Ministry’s consular department.