China Vows "Firm Action" as US-China Trade War Escalates: Tech Decoupling, Tariff Tensions, and Diplomatic Standoff

In a sharp rise in tensions between the world's two greatest economies, China threatened to take "firm action" if the United States does not reverse recent trade and technology restrictions. The threat follows as both sides accuse each other of violating a 90-day trade truce inked in May, as tariffs and non-tariff barriers were called off on a temporary basis.

 

Right at the middle of the spat are a series of fresh US actions against China's technology industry. The US has deepened its Huawei crackdown, declaring that the use of its artificial intelligence chips anywhere in the world would attract criminal sanctions under US export control regulations. Washington has also imposed fresh chip export controls, suspended sales of electronic design automation (EDA) software to China, and vowed to cancel visas for Chinese students, actions Beijing condemns as "discriminatory and restrictive".

 

China's Commerce Ministry has firmly rejected any US allegations of Geneva Convention trade agreement violation, denouncing Washington for "groundless" charges and "erroneous practices". Beijing, meanwhile, has cautioned Washington to prepare for "strong measures to protect its legitimate rights and interests" if the US alters its strategy. The ministry has also complained about the step-up in import duties on certain American goods to 125% as a retaliatory action.

 

At the same time, diplomatic channels are available but strained. US officials have said a phone call between Presidents Trump and Xi Jinping could close the gap, but China has not signaled that this is near. Chinese Foreign Minister Wang Yi has invited the US to put relations back on the "right track," accusing Washington of undermining China's interests by "negative measures.".

 

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Source: Firstpost, The Jakarta Post, Bloomberg