MNI POLICY: China Likely Retaliates On US Tariffs: EUCCC Head

--Beijing Could Devalue Currency, Restrict U.S Firms In Fight Back

     BEIJING (MNI) - China will likely retaliate against Washington's latest

round of tariffs on Chinese goods, the head of the European Union Chamber of

Commerce In China told MNI, with measures including a devaluation of the

currency. 

     "Unfortunately it's too likely" for China to press ahead with tit-for-tat

retaliation against the latest U.S. tariffs, Mats Harborn, president of the EU

CCC, told MNI on the sidelines of a press event Tuesday.

     China's likely retaliation would be to place direct restrictions on U.S.

companies, make custom clearance procedures more difficult for U.S. firms and

devalue the currency, Harborn said.

     He urged China not to continue with retaliation, but to open up their

economy.

     "But China needs to show leadership here, China needs to show that it's

taking responsibility," Harborn said, noting China should stop retaliating or

the economy would suffer. 

     "The easy way is to retaliate, retaliating in different ways," he said. "I

understand that China wants to show a strong stance, but the locked positions

that would stop the reform of China, the biggest loser would be China's

economy," Harborn noted. 

     --U.S. TARIFFS

     Late Monday, U.S. President Donald Trump announced tariffs on an additional

$200 billion of Chinese goods, with a tariff charge of 10%. That could increase

to 25% on Jan 1 2019 if no agreements are reached, with tariffs also trailed on

a further $263 billion of goods.

     Harborn said the tariff action and retaliation would hurt China's path to

the foundation of a strong economy and that they should make economic reform a

priority. 

     His comments appear to be at odds the view of Chinese officials, including

deputy chairman of China Securities Regulatory Commission Fang Xinghai, who over

the weekend stressed China would not bow to U.S. pressure

     China's Ministry of Commerce has not yet announced any retaliatory

measures, although it has previously vowed to do so if the U.S. continued its

"blackmail" and "pressuring" negotiation techniques. Media has reported that

Vice Premier Liu He will hold meetings Tuesday to finalize the government's

official response. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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