Chinese Ambassador to the United States Xie Feng speaks at the Duke-UNC China Leadership Summit via video link on Friday. (Photo provided to chinadaily.com.cn)
Wielding the "baton of tariffs" on the pretext of the fentanyl issue is counterproductive, said Chinese Ambassador to the United States Xie Feng as the United States plans to impose an additional 10 percent duty on imports from China on Tuesday.
Speaking at the Duke-UNC China Leadership Summit via video link on Friday, Xie said that two-way trade between China and the U.S. last year exceeded $680 billion, and around 73,000 American companies are investing in China.
"The extensive common interests we share and the vast room for cooperation we enjoy are there for everyone to see. Any attempt to decouple and disrupt supply chains would cause a heavy blow, and any trade war or tariff war would inflict greater injury on oneself than others," said the envoy.
On Thursday, U.S. President Donald Trump announced plans to impose tariffs on Canada and Mexico starting Tuesday, in addition to doubling the 10 percent universal tariff charged on imports from China, citing the fentanyl issue.
The following day, China's Foreign Ministry noted that the U.S. is using the fentanyl issue "as a pretext to exert tariff pressure and blackmail, acting arbitrarily and showing ingratitude for China's cooperation".
"This approach will not resolve its own concerns, and instead, it will backfire and severely impact dialogue and cooperation between both sides on counternarcotics," spokesperson Lin Jian said.
"Pressure, coercion and threats are not the correct way to engage with China. Mutual respect is a fundamental prerequisite," he said.
Xie also noted that as early as in 2019, China became the first country in the world to officially schedule fentanyl-related substances as a whole class, and the progress in China-U.S. counternarcotics cooperation in recent years has been widely recognized.
He said the shared aspiration of the Chinese and American peoples for a better life is "unstoppable".
"The two sides need to bear in mind the mutually beneficial nature of our bilateral relationship and get more big things done, to the benefit of both our countries and the world," the ambassador said.
Even as the Trump administration cites security and drug-trafficking issues, the economic impact of the threatened tariffs will ultimately land on American consumers and contribute to inflation, according to researchers.
New research from the Federal Reserve Bank of Atlanta, released on Friday, suggests that the additional tariffs are projected to increase the prices of everyday retail goods, such as food, beverages and general merchandise, by roughly 0.8 percent to 1.6 percent.
"While higher tariffs create tariff revenue and favor domestic producers, the price consumers must pay to buy imported goods will increase because firms typically pass some portion of the tariff's cost onto consumers," Atlanta Fed researchers Salomé Baslandze, Simon Fuchs, KC Pringle and Michael Dwight Sparks wrote in the paper.
Earlier last month, Trump threatened and then paused new waves of tariffs on Canada and Mexico for a month, but went ahead with additional tariffs on Chinese goods.
Following that move, the Peterson Institute for International Economics estimated that the 25 percent tariffs on most imports from Mexico and Canada, combined with the additional tariffs on Chinese goods, will cost the typical U.S. household more than $1,200 a year in higher prices.
The prospect of new tariffs prompted former Treasury secretary Lawrence Summers to deem the move "a self‐inflicted wound to the American economy".
"I'd expect inflation over the next three or four months to be higher as a consequence," Summers said in a TV interview on Feb 2.
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