Beijing warns Donald Trump not to impose new tariffs, says it will respond ‘firmly’

China warned the U.S. on Wednesday not to impose new tariffs on its goods as President Trump removes tariffs struck down by the Supreme Court and replaces them with duties that use other legal authorities.

The Commerce Ministry in Beijing said it would not hesitate to retaliate.

“China reserves the right to take all necessary steps to firmly safeguard its legitimate rights and interests,” a ministry spokesperson said.

Mr. Trump is recalibrating his trade agenda after the justices ruled he usurped Congress’ taxing power by invoking the International Emergency Economic Powers Act to impose nation-by-nation levies ranging from 10% to 50%.

Mr. Trump told Congress late Tuesday that he will reissue tariffs under other authorities and would not seek legislative approval for the duties.

“Congressional action will not be necessary,” he said in his State of the Union Address.

Mr. Trump used IEEPA as a nimble tool to gain leverage over other countries. He could threaten tariffs of any amount at a moment’s notice so that foreign officials, fearful of losing access to the rich U.S. market, would make concessions.

The Supreme Court ruling canceled that power, but Mr. Trump insists he has plenty of weapons left in his arsenal, including the ability to impose a complete trade embargo on goods from a country.

He warned countries that made prior trade deals with the U.S. to comply with the terms.

“The legal power that I, as president, have to make a new deal could be far worse for them, and therefore they will continue to work along the same successful path that we had negotiated before the Supreme Court’s unfortunate involvement,” he said. 

The president pivoted from the court ruling by announcing a 10% global tariff issued under section 122 of the Trade Act of 1974. He is working to raise that rate to 15%. 

The authority is valid for 150 days unless renewed by Congress. 

In the meantime, the administration is conducting investigations to issue permanent tariffs under Section 232 of the Trade Expansion Act of 1962, which authorizes the president to impose duties or quotas on imports deemed a national security threat, and Section 301 of the Trade Act, which counteract unfair foreign trade practices.

An analysis by Global Trade Alert found China stands to benefit from the IEEPA ruling, reducing its tariff burden by roughly 7 percentage points. 

However, many Chinese goods still face a range of stacked tariffs under various authorities that reach double digits. 

China has been willing to play hardball over Mr. Trump’s tariffs. Last year, it withheld its vast supply of rare earth elements to negotiate concessions from the U.S. Mr. Trump is scheduled to travel to China from March 31 to April 2 for high-stakes meetings with Chinese President Xi Jinping.

In the U.S., companies are digesting the new policies while demanding repayment for the IEEPA tariffs that were deemed illegal.

FedEx, the major parcel carrier, sued for refunds, joining companies like Costco that filed lawsuits before the ruling.

Tariffs are duties on foreign goods brought into U.S. markets. The importer of record, often an American entity, pays the money to U.S. Customs and Border Protection.

New York Gov. Kathy Hochul, a Democrat, estimated that tariffs cost New Yorkers about $13.5 billion.

“Trump’s illegal tariffs are a backdoor tax on New Yorkers,” Ms. Hochul wrote on social media. “The administration should pay every dollar back.”

The president shows no sign of moving away from tariffs as a powerful negotiating tool and revenue generator.

Mr. Trump late Tuesday spoke about his tariffs as a permanent lever to increase revenue rather than temporary levies designed to encourage companies to bring manufacturing jobs back to the U.S. 

“As time goes by, I believe that tariffs paid for by foreign countries will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love,” he said.