Far from backing down, its government announced retaliatory tariffs of 5 percent to 10 percent on $60 billion of USA imports.
With an annual decline in the share of foreign trade in the whole Chinese economy, China is consolidating the fundamental role that domestic consumption plays in its growth. The tariffs will start at 10 percent, then rise to 25 percent on January 1. Did he imagine that this threat would force an autocratic regime like China's to back down and lose face?
This week Trump said he would press ahead with 10 percent levies on $200 billion of imports - on top of $50 billion already targeted - prompting Beijing to target another $60 billion of us goods with 5 to 10 percent taxes.
China, trying to lower the temperature, is keeping its tariffs on USA goods down to 5 percent for the moment, but it can't hold that line forever if the United States goes on ratcheting up the ones it has imposed on China. "We encourage the two countries to find near-term solutions to ease trade tensions that will allow more opportunities for USA exports and benefit families in both countries". "And we're just not letting that happen anymore". China now is home to more tech unicorns than the USA, and the government is doubling down on supporting artificial intelligence research.
"Contrary to views in Washington, China can - and will - dig its heels in and we are not optimistic about the prospect for a resolution in the short term", said Zarit of the American Chamber of Commerce. "Many manufacturers rely on component parts from China to assemble and finish production in the United States".
At the root of the trade war are USA complaints about China's plans to try to overtake US technological supremacy.
After China on Tuesday retaliated with duties on $60 billion of American products, Trump accused China of trying to sway the elections. It's also true that the Chinese financial system is as overloaded with bad debts as American banks were in 2008. China was also the second-largest export market for businesses services such as travel, education and industrial processes with $175 million worth of trade, which is a $369% spike from only $37 million a decade ago. That makes it more likely that the additional tariffs will be take place. In this scenario, it's worldwide trade that would collapse, which wouldn't be in anybody's interest.
"They (Chinese) rebuilt their country with tremendous amounts of money pouring out of the United States". Indeed, Xi and the Communist Party hierarchy are coming to the conclusion that Trump's trade war is created to "thwart China's rise".
The worsening dispute, Alexander said, is taking the United States into unknown economic territory.
"The world economy has been imperiled for a long time, because the largest economy in the world is running a trade deficit", he said.