China reportedly says it won’t just play defense in a trade war with the US

President Donald Trump, left, and China's President Xi Jinping arrive for a meeting on the sidelines of the G-20 Summit in Hamburg, Germany. 

Saul Loeb | AFP | Getty Images

President Donald Trump, left, and China’s President Xi Jinping arrive for a meeting on the sidelines of the G-20 Summit in Hamburg, Germany. 

A senior administration official told Reuters over the weekend that Trump was likely to announce the new tariffs as early as Monday.

“It is nothing new for the U.S. to try to escalate tensions so as to exploit more gains at the negotiating table,” the Global Times, which is published by the ruling Communist Party’s People’s Daily, wrote in an editorial.

“We are looking forward to a more beautiful counter-attack and will keep increasing the pain felt by the U.S.,” the Chinese-language column said.

Besides retaliating with tariffs, China could also restrict export of goods, raw materials and components core to U.S. manufacturing supply chains, former finance minister Lou Jiwei told a Beijing forum on Sunday, according to an attendee.

Lou is chairman of the National Council for Social Security Fund.

The person who attended the event and is familiar with the White House’s thinking said such a move would likely attract sharp retaliation from Washington, which has studied its own limits on exporting key technologies to China.

“Lou Jiwei’s approach would feed the most hawkish sentiments in the U.S. government,” the person said, declining to be identified given the sensitivity of the matter.

China is a key supplier of minor metals and rare earths used in consumer electronics and other goods.

Beijing has said it would retaliate to trade war escalation with tariffs of its own as well as qualitative measures, which it has not specified but are perceived within the U.S. business community as likely to include increased customs and regulatory scrutiny.

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