China said Sunday that it "firmly opposes" the new tariffs imposed on Beijing by U.S. President Donald Trump shortly after his return to the White House, vowing to take "corresponding countermeasures to resolutely safeguard our own rights and interests."
Unveiling sweeping measures against major trade partners on Saturday, Trump announced an additional 10% tariff on Chinese imports on top of existing duties.
Still, analysts opined that Trump's new tariffs would probably not have a major impact on China's economy but may herald the opening salvo of another bruising trade war with Beijing.
On Saturday, the U.S. President announced sweeping measures against major trade partners, as pledged shortly after his inauguration.
Trump said the measures aimed to punish countries for failing to halt flows of illegal migrants and drugs, including fentanyl, into the U.S.
In a statement on Sunday, China's Commerce Ministry slammed Washington's "erroneous practices," saying Beijing was "strongly dissatisfied with this and firmly opposes it."
The ministry said Beijing would file a lawsuit at the World Trade Organization (WTO), arguing that "the unilateral imposition of tariffs by the U.S. seriously violates WTO rules."
It added that the duties were "not only unhelpful in solving the U.S.'s own problems but also undermine normal economic and trade cooperation."
"China hopes that the U.S. will objectively and rationally view and deal with its own issues like fentanyl, rather than threatening other countries with tariffs at every turn," the ministry said.
It said Beijing "urges the U.S. to correct its erroneous practices, meet China halfway, face up to its problems, have frank dialogues, strengthen cooperation and manage differences based on equality, mutual benefit and mutual respect."
In a separate statement, China's foreign ministry said, "There are no winners in a trade war or tariff war."
"The practice of imposing additional tariffs is not constructive and will inevitably affect and damage future bilateral cooperation on drug control," a ministry spokesperson said.
However, Trump's action against Beijing was "not a big shock to China's economy," according to Zhiwei Zhang, president of Pinpoint Asset Management.
Given Beijing had already factored in higher tariffs this year, the move was "unlikely to change the market expectation on China's macro outlook," Zhang said.
"I don't think China needs to take action, such as exchange rate depreciation, to offset (the impact)," he added.
According to Bloomberg Economics, the 10% levy could affect 40% of Beijing's goods exports to the U.S., or 0.9% of the Chinese gross domestic product (GDP).
That is a small fraction of China's vast economy, but it would put extra pressure on policymakers already grappling with slowing growth, a property sector crisis and sluggish domestic consumption.
Experts said Trump's focus seemed to be more on trade relationships with Canada and Mexico than China.
Under the new rules, Canadian and Mexican exports to the U.S. will face 25% tariffs, with a partial exemption for Canadian energy resources.
But with targeted countries already vowing retaliation and Trump promising more duties in the future, the move was "just the first strike in what could become a very destructive global trade war," said Paul Ashworth, chief North American economist at Capital Economics.
China has said it will take countermeasures but has not elaborated on what form it might take.
Gary Ng, a senior economist at Natixis, said Beijing "may react by imposing reciprocal tariffs on U.S. imports, limiting exports of critical materials, and restricting market access to some American firms."
"At the same time, China may also see this as an opportunity to divide U.S. allies and build closer relationships with other countries," he told Agence France Presse (AFP).
Zhang of Pinpoint said, "The trade negotiation between China and the U.S. will be a long process."
"I think this is just the beginning. We will have to wait and see if the U.S. will raise tariffs on China further down the road," he said.
On the streets of Beijing this weekend, the threat of looming tariffs was met with a collective shrug.
"China doesn't really care too much about the (trade) barriers because we have already prepared for them," Xu Yiming, a private equity professional, told AFP outside a busy downtown shopping mall.
China's robust supply chains and cheap exports were "actually good for the American public, but MAGA supporters might need some trade barriers to help bring jobs back to the U.S.," the 36-year-old added, using the acronym for Trump's grassroots movement.
"In the end, it's everyday people who bear the brunt of tariffs," he said.
Most people approached by AFP reporters said they were either unaware of the prospective levies or did not understand them well enough.
And though some declined to speak due to the political sensitivity of China-U.S. ties, many seemed more interested in enjoying the ongoing Lunar New Year holiday.
"He should look after the U.S. and leave China to us," a gruff middle-aged man said of Trump before wandering off in the direction of a raucous temple fair.
