BEIJING – China warned the Trump administration on July 8 against reigniting trade tension by restoring tariffs on its goods in August, and threatened to retaliate against nations that strike deals with the United States to cut China out of supply chains.

Washington and Beijing

in June that restored a fragile truce. But with many details still unclear, traders and investors on both sides of the Pacific are watching to see if it will unravel or lead to a lasting detente.

On July 7, President Donald Trump began notifying trade partners of

after he delayed all but 10 per cent of his April duties on most countries to give them time to strike deals with the world’s largest economy.

China, initially singled out with tariffs exceeding 100 per cent, has until Aug 12 to reach an agreement with the White House to keep Mr Trump from reinstating additional import curbs imposed during tit-for-tat tariff exchanges in April and May.

“One conclusion is abundantly clear: Dialogue and cooperation are the only correct path,” the official People’s Daily said in a commentary, referring to the exchanges in the current round of China-US trade tension.

The article was signed “Zhong Sheng”, or “Voice of China”, a term the paper uses to express views on foreign policy.

Reiterating Beijing’s view that Mr Trump’s tariffs amount to “bullying”, the paper added: “Practice has proven that only by firmly upholding principled positions can one truly safeguard one’s legitimate rights and interests.”

The remarks set the stage for another round of tariff war should Mr Trump stick to what the ruling Communist Party’s official daily said was “a so-called final deadline”.

The average US tariff on Chinese exports now stands at 51.1 per cent, while the average Chinese duty on US goods is 32.6 per cent, with both sides covering all their trade, the Peterson Institute for International Economics said.

The paper also took a swipe at regional economies that are considering striking tariff reduction deals with the US that cut China out of their supply chains.

Vietnam earlier secured a tariff reduction to 20 per cent from 46 per cent with a deal for goods “transshipped” through it, typically originating from China, to be subjected to a levy of 40 per cent.

“China firmly opposes any side striking a deal that sacrifices Chinese interests in exchange for tariff concessions,” the paper said.

“If such a situation arises, China will not accept it and will respond resolutely to protect its legitimate interests.” REUTERS