The suggestion by Lou Jiwei, a former finance minister, would feed the most hawkish sentiments in the Trump Administration and would attract a sharp retaliation from the U.S.
With U.S. President Donald Trump expecting to announce new tariffs on U.S. imports of Chinese goods worth $200 billion on as early as Monday, a Chinese tabloid warned that Beijing may not be content to play only defense in the escalating trade war with the United States.
If the Trump Administration was to go ahead and levy the additional tariffs, China could potentially decline to participate in the proposed trade talks scheduled to be held later this month, said a report from the Wall Street Journal citing Chinese officials.
According to the report, China would not negotiate “with a gun pointed to its head.”
Last week, China and the U.S. appeared to have made some progress following which the U.S. Treasury Department invited senior Chinese officials, including Vice Premier Liu He, for more negotiations.
A Reuters report citing a senior administration official has disclosed that despite these feelers, Trump is likely to go ahead and announce the new tariffs as early as Monday.
“It is nothing new for the U.S. to try to escalate tensions so as to exploit more gains at the negotiating table,” reads the editorial of the Global Times, a news daily published by the ruling Communist Party’s People’s Daily.
“We are looking forward to a more beautiful counter-attack and will keep increasing the pain felt by the U.S.,” states the report.
According to an attendee, former finance minister Lou Jiwei told a forum in Beijing that China has a couple of options including restricting the export of raw materials and components that form the core of the U.S. manufacturing supply chains.
Incidentally, Lou is chairman of the National Council for Social Security Fund.
According to another attendee who is familiar with the way the White House thinks, if China were to act on this suggestion, it would in most probability, attract a sharp retaliation from Washington.
“Lou Jiwei’s approach would feed the most hawkish sentiments in the U.S. government,” said the the person on the condition of anonymity given the sensitivity of the matter.
Trump has demanded that China ends its policies of acquiring U.S. technologies and intellectual properties, roll back high0-tech industrial subsidies and cut back on its $375 billion trade surplus with the U.S.