Late last week, while speaking to reporters on the tarmac, Donald Trump said he didn’t expect Beijing to retaliate to the tariffs that will go into effect on September 1.
Although the US side delayed duties on some key consumer goods until December 15 in a bid to avoid driving up prices ahead of the holiday shopping season, not everything was given a reprieve which means some levies will take effect in a week.
China last week said the country had no choice but to hit back. Pressed on what he might do if Beijing did respond, Trump emphasized that the country is losing a lot of jobs, an effort to suggest that Xi simply cannot afford to push things much further.
Read more: Conflicting China Trade Comments Whipsaw Nervous Markets
Well, on Friday, Global Times editor Hu Xijin was out with another one of his signature “based on what I know” tweets and what Hu “knows” today is that “China will take further countermeasures in response to US tariffs”.
Hu went on to say “Beijing will soon unveil a plan of imposing retaliatory tariffs on certain US products” and emphasized that “China has ammunition to fight back”.
Hu, for those unaware, essentially tweets on behalf of the Party.
Earlier this week, Trump suggested he was willing to put the US through a recession if it meant pursuing the China fight. “I am the chosen one”, he told reporters, gesturing towards the heavens and insisting that “somebody had to do it”.
On Thursday, Hu referenced the US president’s “chosen one” remarks and accused the US of going “to great lengths to suppress China”. He then struck a defiant tone. “But the damage actually caused is much less than what we were worried about”, he continued. “People who were fearful of the US no longer feel so. [The] trade war is bad, but we’re doing well”.
And here Americans thought trade wars were “good and easy to win”.
Goldman last week updated their expectations for the US economy in the context of the next round of tariffs. “We expect the trade war drag on the annualized pace of GDP growth to peak in H2 at around 0.4%, up from 0.2% in 2019H1”, the bank warned.
(Goldman)
That is a self-inflicted wound at a time when growth would already be decelerating stateside.
Hu closed out his warning on Friday by promising that “the US side will feel the pain”.
