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China taunts US over trade war: ‘Don’t say we didn’t warn you’

China's President Xi Jinping. (Alexei Nikolsky/Russian Presidential Press and Information Office/TASS/Abaca Press/TNS)
May 30, 2019

China this week issued a warning to the U.S. as tensions escalate over the trade war, and the Communist Party’s official newspaper even went to far as to liken the trade conflict to “economic terrorism.”

In an opinion piece published by The People’s Daily, the threat said, “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!” according to a translation reported by CNBC on Wednesday.

The piece was titled, “United States, don’t underestimate China’s ability to strike back,” and echoed identical warnings previously published by the newspaper ahead of conflicts with India in 1962 and Vietnam in 1979.

“At present, the United States completely overestimates its ability to control the global supply chain and is due to slap itself in the face when it sobers up from its happy, ignorant self-indulgence,” the paper said.

“Will rare earths become a counter weapon for China to hit back against the pressure the United States has put on for no reason at all? The answer is no mystery,” the paper added.

The following day, a Chinese official made similar condemning remarks while speaking to the media.

China’s Ministry of Foreign Affairs spokesperson Lu Kang said that the Trump Administration “brought huge damage to the economy of other countries and the U.S. itself,” CNN reported Thursday.

Lu added that the U.S. trade policies are “typical economic terrorism, economic hegemonism, and economic unilateralism.”

The latest warning and remarks come amid indications that China could leverage its dominance as a rare earths supplier for U.S. goods in the trade conflict.

Approximately 80 percent of rare earth imports in the U.S. originate in China, most of which is used in manufacturing computer chips.

On Wednesday, the Department of Defense delivered a report to Congress in which it explored options for reducing reliance on rare earth minerals from China.

China’s move to seek leverage may be its next power move in response to Trump’s May 15 order that bans Chinese technology companies from purchasing sensitive electronic components, such as computer chips.

Earlier this month, the Trump Administration announced a tariff increase on $200 billion worth of Chinese imports, taking tariffs from 10 percent to 25 percent. Days later, China imposed retaliatory tariffs up to 25 percent on $60 billion worth of U.S. imports.

The Chinese economy has taken a harder hit than the U.S. as a result of the trade dispute. China reported slower retail growth and industrial productivity during April.

Trump has suggested that he is considering tariffs on the rest of all Chinese imports.