China declares readiness for war in all forms against the US

After Trump raised tariffs on Chinese goods, China swiftly retaliated by imposing a 10-15% tariff on US agricultural products.

This declaration is one of China's strongest statements since Trump took office and comes as Chinese leaders convene in Beijing for the annual National People's Congress meeting.

In response to the United States' recent tariff levy against China, Beijing "will take all necessary measures to firmly safeguard its legitimate interests," Foreign Ministry spokesman Lin Jian said on Monday.

"China firmly opposes the US once again using the fentanyl issue as an excuse to threaten to raise tariffs on Chinese products exported to the US," he said.

In response to the US' pressure on Mexico and Canada to match its tariff levies against China, Lin said, "As we have stated time and time again, there are no winners in trade wars and tariff wars, and blowing out other people's lights doesn't make oneself brighter."

He emphasized that all parties should abide by World Trade Organization rules and the principle of market economy, engage in consultations to address respective concerns through dialogues based on equality and mutual respect, and work together to deal with unilateralism and trade protectionism.

Wielding the "baton of tariffs" on the pretext of the fentanyl issue is counterproductive, said Chinese Ambassador to the United States Xie Feng 

Speaking at the Duke-UNC China Leadership Summit via video link on Friday, Xie said that two-way trade between China and the US last year exceeded $680 billion, and around 73,000 American companies are investing in China.

"The extensive common interests we share and the vast room for cooperation we enjoy are there for everyone to see. Any attempt to decouple and disrupt supply chains would cause a heavy blow, and any trade war or tariff war would inflict greater injury on oneself than others," said the envoy.

On Thursday, US President Donald Trump announced plans to impose tariffs on Canada and Mexico starting Tuesday, in addition to doubling the 10 percent universal tariff charged on imports from China, citing the fentanyl issue.

The following day, China's Foreign Ministry noted that the US is using the fentanyl issue "as a pretext to exert tariff pressure and blackmail, acting arbitrarily and showing ingratitude for China's cooperation".

"This approach will not resolve its own concerns, and instead, it will backfire and severely impact dialogue and cooperation between both sides on counternarcotics," spokesperson Lin Jian said.

"Pressure, coercion and threats are not the correct way to engage with China. Mutual respect is a fundamental prerequisite," he said.

Xie also noted that as early as in 2019, China became the first country in the world to officially schedule fentanyl-related substances as a whole class, and the progress in China-US counternarcotics cooperation in recent years has been widely recognized.

He said the shared aspiration of the Chinese and American peoples for a better life is "unstoppable".

"The two sides need to bear in mind the mutually beneficial nature of our bilateral relationship and get more big things done, to the benefit of both our countries and the world," the ambassador said.

Even as the Trump administration cites security and drug-trafficking issues, the economic impact of the threatened tariffs will ultimately land on American consumers and contribute to inflation, according to researchers.

New research from the Federal Reserve Bank of Atlanta, released on Friday, suggests that the additional tariffs are projected to increase the prices of everyday retail goods, such as food, beverages and general merchandise, by roughly 0.8 percent to 1.6 percent.

"While higher tariffs create tariff revenue and favor domestic producers, the price consumers must pay to buy imported goods will increase because firms typically pass some portion of the tariff's cost onto consumers," Atlanta Fed researchers Salomé Baslandze, Simon Fuchs, KC Pringle and Michael Dwight Sparks wrote in the paper.

Earlier last month, Trump threatened and then paused new waves of tariffs on Canada and Mexico for a month, but went ahead with additional tariffs on Chinese goods.

Following that move, the Peterson Institute for International Economics estimated that the 25 percent tariffs on most imports from Mexico and Canada, combined with the additional tariffs on Chinese goods, will cost the typical US household more than $1,200 a year in higher prices.

The prospect of new tariffs prompted former Treasury secretary Lawrence Summers to deem the move "a self‐inflicted wound to the American economy".

"I'd expect inflation over the next three or four months to be higher as a consequence," Summers said in a TV interview on Feb 2.