New U.S. trade action 'poisons' atmosphere, won't work on China: regulator

TIANJIN, China (Reuters) - The United State’s trade actions against China will not work as China has ample fiscal and monetary policy tools to cope with the impact, a senior securities market official said on Tuesday.

FILE PHOTO: A worker places U.S. and China flags near the Forbidden City ahead of a visit by U.S. President Donald Trump to Beijing, in Beijing, China November 8, 2017. REUTERS/Damir Sagolj

Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), said at a conference in Tianjin that he hopes the two sides can sit down and negotiate on trade and that he looks forward to good China-U.S. trade relations over the long term.

“President Trump is a hard-hitting businessman, and he tries to put pressure on China so he can get concessions from our negotiations. I think that kind of tactic is not going to work with China.”

President Donald Trump escalated his trade war with China on Monday, imposing 10 percent tariffs on about $200 billion worth of Chinese imports.

The tariffs on the $200 billion list will start on September 24, according to a senior U.S. administration official.

Trump also threatened to “immediately pursue” tariffs on another $267 billion of imports if China retaliates.

“If he puts tariffs on all Chinese exports to the United States - which he says he will - even in that scenario, the negative impact on China’s economy is about 0.7 percent,” Fang said. He did not specify on whether he was referring to the impact on the amount of gross domestic product (GDP) or the growth rate of GDP.

The U.S. has “poisoned” the atmosphere for negotiations, Fang said, but added that the two sides can talk about how to cut the U.S. trade deficit with China.

Vice Premier Liu He is set to convene a meeting in Beijing on Tuesday morning to discuss the government’s response to the U.S. decision, Bloomberg News reported, citing a person briefed on the matter.

The Chinese government may decline to participate in proposed trade talks with the United States later this month if the Trump administration moves forward with additional tariffs on imported Chinese goods, the Wall Street Journal reported on Sunday, citing Chinese officials.

Reporting by Kevin Yao; Writing by Elias Glenn; Editing by Kim Coghill