Xi Jinping, China’s president, left, and U.S. President Donald Trump. (Photographer: Qilai Shen/Bloomberg)

China Rails Against U.S. Trade Attacks With New Tariffs Looming

(Bloomberg) -- The U.S. and China clashed at a World Trade Organization meeting with Washington demanding reforms to make the Chinese economy more responsive to market forces.

Chinese Ambassador Zhang Xiangchen said Beijing wouldn’t respond to heavy-handed tactics.

“Extortion, distortion or demonization does no good to resolve the issues,” Zhang said Thursday in Geneva. “Holding our feet to the fire has never worked.”

The Chinese government has drawn up plans to retaliate against any additional U.S. tariffs, regardless of the volume of goods targeted, another Chinese official said at an event in Beijing.

China Rails Against U.S. Trade Attacks With New Tariffs Looming

The office of the U.S. Trade Representative is preparing levies on an additional $200 billion of Chinese goods and President Donald Trump said he is “ready to go” with tariffs on as much as $500 billion, roughly the value of all China’s annual exports to the U.S.

China is “the most protectionist, mercantilist economy in the world,” Deputy U.S. Trade Representative Dennis Shea told the meeting in Geneva. “China’s size magnifies the harm caused by its state-led, mercantilist approach to trade and investment, and this harm is growing every day and can no longer be tolerated.”

WTO Spokesman Keith Rockwell described the conversation as diplomatic and constructive.

“The room was absolutely spellbound,” he said at a press briefing following the meeting. “It was dramatic.”

Currency Manipulation

The two countries last month launched their initial salvos by imposing duties on $34 billion worth of each other’s imports. China is ready to respond to more U.S. measures whether they involve $16 billion or $200 billion of imports, the official in Beijing said Thursday, asking not to be identified.

Trump has also accused China of manipulating its currency during the yuan’s monthlong losing streak. China’s Ministry of Commerce spokesman Gao Feng said Thursday that the two sides have had no contact about renewing talks and the U.S. is fueling tensions while putting all the blame on China.

“The best solution from a WTO perspective is for China finally to take the initiative to fully and effectively embrace open, market-oriented policies like other WTO members,” Shea said.

©2018 Bloomberg L.P.