China slams US for escalating trade war: It's 'naked economic terrorism'

As both sides inch closer to a full-on trade war, China lashed out again at the U.S., arguing that Washington “deliberately provoking trade disputes” is equivalent to “naked economic terrorism.”

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Chinese Vice Foreign Minister Zhang Hanhui spoke to reporters in Beijing, China, and said Thursday the country isn't frightened of a trade war with the U.S.

The two countries have been embroiled in a standoff that escalated earlier this month when President Trump increased tariffs on $200 billion worth of Chinese imports to 25 percent. China hit back at the U.S. by announcing plans to raise tariffs on $60 billion worth of American products starting next month.

“We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying,” Zhang said, according to Reuters.

Zhang said there are no winners in a trade war, adding that a U.S.-China “trade clash will have a serious negative effect on global economic development and recovery.”

The senior Chinese diplomat also mentioned an upcoming meeting between Chinese President Xi Jinping and Russian President Vladimir Putin in Russia.

“We will definitely properly deal with all external challenges, do our own thing well, develop our economy, and continue to raise the living standards of our two peoples,” Zhang told reporters. “At the same time, we have the confidence, resolve and ability to safeguard our country’s sovereignty, security, respect and security and development interests.”

The U.S. also escalated the trade standoff by placing Chinese tech giant Huawei on a blacklist that prevents U.S. companies from supplying computer chips, software and other components to the company without government approval. Google, which provides its Android operating system for Huawei smartphones, announced it was issuing a ban in conjunction with President Trump’s executive order.

Chinese tech giant Huawei was placed on a blacklist by the U.S. (AP)

But shortly after announcing the ban, Google said it was halting its plan after the U.S. Commerce Department granted a 90-day license for companies and Internet providers to coordinate with the Chinese tech giant in an effort to help existing customers.

Amid the Huawei blacklist and trade sanctions, China reminded the U.S. on Wednesday that it still had more ammo to unleash, specifically rare earth minerals.

Chinese state media warned that Beijing could cut the U.S. off from exotic minerals that are widely used in electric cars and mobile phones. Rare earth minerals are a group of 17 metals that have been deemed critical by the U.S. Geological Survey for multiple sectors in the U.S., including national defense. China accounts for more than 90 percent of global production, the U.S. Geological Survey reported.

Facing new trade sanctions and a U.S. clampdown on its top telecommunications company, China issued a pointed reminder on Wednesday that it has yet to unleash all its weapons in its trade war with the Trump administration. (AP)

“As Chinese officials have reiterated, they have a ‘toolbox’ large enough to fix any problem that may arise as trade tensions escalate, and they are ready to fight back ‘at any cost’,” state-run China Daily newspaper said in an editorial on the same day Zhang made his comments.

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“It would be naive to think that China does not have other countermeasures apart from rare earths to hand.”

Fox Business’ Megan Henney and The Associated Press contributed to this report.