China-US Trade Tensions: China defends free trade after US announces new tariffs

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02:27

Another escalation in the trade war between China and the United States. The two countries have proposed additional tariffs on imported goods, set to go into effect next week. And analysts warn the global economy is at risk. CGTN's Jim Spellman reports.

Chinese Premier Li Keqiang -- defending free trade at the Summer Davos Forum in Tianjin.

LI KEQIANG CHINESE PREMIER "It is indeed necessary to cooperate fairly and to maintain the principal rules of multilateralism and free trade, because no matter how much these rules need to improve, what it offers us is inclusive. It is progress for human civilization. If there are problems, then we should resolve them through negotiation. No unilateral action stands a chance of solving the problems."

Li's comments come after U.S. President Donald Trump announced new tariffs on 200 billion dollars' worth of Chinese goods. He wants to reduce the U.S. trade deficit with China and wants Beijing to end industrial policies meant to promote China's high-tech sector.

DONALD TRUMP US PRESIDENT "China's been taking advantage of the United States for a long time and that's not happening anymore, we can't let that happen."

China quickly responded by imposing its own tariffs on 60 billion dollars' worth of U.S. products. In a tweet, Trump suggested the Chinese countermeasures are aimed at products that will hurt Trump's Republican Party in the upcoming midterm elections. China rejects this.

GENG SHUANG, SPOKESPERSON CHINESE MINISTRY OF FOREIGN AFFAIRS "Anyone who is familiar with China's diplomatic policy should know that China pursues the principle and position of not interfering in other countries' domestic affairs. We don't want others to interfere in our domestic politics, and we will not interfere in the domestic politics of others."

Analysts say the tariffs are putting global economic growth at risk.

GARY SHAPIRO CONSUMER TECHNOLOGY ASSOCIATION "Every country in the world is paying attention to what's happening here. Because when two elephants fight, the ground gets trampled and the world economy is what's at risk today."

China says it remains committed to its reform and opening up policy.

LI KEQIANG CHINESE PREMIER "In this process, all companies either Chinese or foreign-owned companies will be treated as equals. We will also create a better business environment and expand market access to foreign-owned companies by streamlining the administration and delegating powers so that they can compete on a level playing field in the Chinese market."

JIM SPELLMAN WASHINGTON "The new round of tariffs go into effect September 24th. It's not clear if or when a new round of negotiations may take place. Jim Spellman, CGTN, Washington."