Chinese embassy officials in the U.S. has warned that a trade war between the two countries would have no winners, after President-elect Donald Trump reiterated plans to impose additional tariffs on Chinese imports.
In a statement to the press, Chinese Embassy Spokesperson Liu Pengyu said: “China believes that China-US economic and trade cooperation is mutually beneficial in nature…No one will win a trade war or a tariff war.”
In his announcement, Trump accused Chinese authorities of failing to act against the inflow of fentanyl into the U.S. and said the tariffs would remain until this was stopped.
Liu dismissed Trump’s accusation, pointing to an agreement between Chinese President Xi Jinping and President Joe Biden to crack down on the drug trade and said “the idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality.”
Shortly after Trump’s announcement, the Chinese yuan slumped to a four-month low of 7.2730 per dollar.
The Canadian currency slumped to 1.41 per U.S. dollar—its worst level in more than four years—while the Mexican peso stumbled to 20.5 per dollar.
READ ALSO: Trump mulls higher tariffs on Mexico, Canada and China
Trump’s announcement also hit Asian stocks, with Japan’s Nikkei 225 index dropping nearly 2%, before recovering to 38,442 points, down around 0.9% from the previous day.
Japanese carmakers Nissan and Toyota, which have major production facilities in Mexico, were the worst hit, with Nissan’s shares dropping 4.9% at one point, while Toyota’s fell 2.9%—before recovering slightly to 3.64% down and 1% down respectively. South Korea’s KOSPI index fell 0.5% while the Taiwanese TAIEX was down 1.17%.
In a post on Truth Social Monday, Trump said he would enact a key campaign promise and impose tariffs on foreign-made goods by outlining plans to target imports from China, Mexico and Canada.
Trump said he would impose a 10% tariff on Chinese goods “above any additional Tariffs.” The president-elect accused Beijing of inaction on “massive amounts of drugs, in particular Fentanyl, being sent into the United States.”
Trump also said he plans to impose 25% tariffs on all products from Mexico and Canada as one of his first executive orders. The president-elect also accused the two U.S. neighbors of sending drugs and undocumented immigrants to the country.
Forbes.com
