China Responds to U.S. ‘Slander’ Over Tariffs, Rebuts Counterfeit Claims

China isn’t taking the U.S.’ accusations of unfair trade practices quietly.

The country’s Ministry of Commerce released a statement Thursday responding to President Donald Trump‘s most recent trade war escalation — a list of an additional $200 billion in Chinese goods that will be subject to a 10 percent tariff hike — and put the blame for the trade imbalance squarely on the States. It called Trump’s claims that China has taken advantage of the American economy “slander” and “a distortion of facts.”

The statement addresses the “massive trade deficit” the president has repeatedly cited in justifying the tariffs, a figure that reached $375.2 billion last year. The Chinese ministry argued that the discrepancy has more to do with differences “in industrial competitiveness and international division of labor” than any unfair practices. While rising wages have encouraged many firms to move production to cheaper shores like Vietnam in recent years, China has been the world’s manufacturing hub for several decades, thanks in part to government policies encouraging domestic production and a surplus of human capital.

Still, the American government sees some leverage: exports to the U.S. totaled approximately $505 billion last year (including shoes, clothing, and electronics), accounting for 19 percent of China’s exports and almost 4 percent of its GDP last year.

The president has also railed against China for purportedly stealing American intellectual property — a practice that has long been a scourge of the fashion industry, and has hit tech giants like Apple through alleged corporate espionage. (In 2016, nearly 90 percent of counterfeit products seized by the U.S. originated in China and Hong Kong.)

The Chinese ministry, however, says the government has “already put in place a full-fledged legal system to protect intellectual property rights” and last year paid $28.6 billion in royalties, 15 times more than when it first joined the World Trade Organization in 2001.

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