China says no one can win trade war after Trump threatens tariffs

Neither the United States nor China would win a trade war, the Chinese Embassy in Washington said on Monday, after US President-elect Donald Trump threatened to slap an additional 10 percent tariff on all Chinese imports when he takes office on January 20.

"About the issue of US tariffs on China, China believes that China-US economic and trade cooperation is mutually beneficial in nature," Chinese Embassy spokesperson Liu Pengyu said in a statement. "No one will win a trade war or a tariff war."

Trump on Monday pledged big tariffs on the US's three largest trading partners – Canada, Mexico and China – detailing how he will implement campaign promises that could trigger trade wars.

Trump, who takes office on January 20, said he would impose "an additional 10 percent tariff, above any additional tariffs" on imports from China until China stops the flow of illegal drugs, particularly fentanyl, into the US.

The Chinese foreign ministry said in a statement that China was willing to continue anti-drug cooperation with the US on the basis of "equality, mutual benefit and mutual respect."

"The US side should cherish China's goodwill and safeguard the hard-won sound situation of Sino-US drug control cooperation," the ministry said.

In his statement, Liu said China had taken steps to combat drug trafficking after an agreement was reached last year between President Joe Biden and President Xi Jinping.

"The Chinese side has notified the US side of the progress made in US-related law enforcement operations against narcotics," Liu said.

"All these prove that the idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality."

There has been incremental but visible progress in cooperation over shutting down illicit traffic in chemicals used to produce deadly fentanyl after Xi and Biden agreed to resume joint efforts last year.

In June, China's top prosecutor urged its law enforcement officials to focus on combating drug trafficking, as the two countries unveiled a joint investigation.

In August, days after a meeting of a joint counter-narcotics working group, China said it would tighten controls on three chemicals essential for making fentanyl.

Vice President Han Zheng, speaking at a supply chain expo in Beijing yesterday, said China was ready to work with other countries to build an open world economic system and maintain the stability of global industrial and supply chains.

In a separate post, Trump said he would impose a 25 percent tariff on imports from Canada and Mexico until they clamped down on drugs, particularly fentanyl, and migrants crossing the border, in a move that would appear to violate a free-trade agreement.

The two posts on Truth Social represent some of Trump's most specific comments on how he will implement his economic agenda since winning the November 5 election on promises to "put America first."

"On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 percent Tariff on ALL products coming into the United States, and its ridiculous Open Borders," Trump said.

The US accounted for more than 83 percent of exports from Mexico in 2023 and 75 percent of Canadian exports.

The tariffs may also spell trouble for overseas companies like the many Asian auto and electronics manufacturers that use Mexico as a low-cost production gateway for the US market.

Trump's threatened new tariffs would appear to violate the terms of the US-Mexico-Canada Agreement on trade. The deal which Trump signed into law took effect in 2020 and continued the largely duty-free trade between the three countries.

Canada and the US at one point imposed sanctions on each others' products during the rancorous talks that eventually led to USMCA. Trump will have the opportunity to renegotiate the agreement in 2026, when a "sunset" provision will force either a withdrawal or talks on changes to the pact.

Economists say Trump's overall tariff plans, likely his most consequential economic policy, would push US import duties back up to 1930s levels, stoke inflation, collapse US-China trade, draw retaliation and drastically reorder supply chains.