As U.S.-China trade tensions are escalating, Chinese Premier Li Keqiang said Wednesday his government is able to help the domestic economy withstand challenges.

“China is confronted with a host of difficulties and challenges in economic development,” Li acknowledged during an address speaking at a World Economic Forum conference in Tianjin, China.

“Deeply integrated into the world economy, the Chinese economy is inevitably affected by notable changes in the global economic and trade context,” he said. “Indeed, we’re facing greater difficulties in keeping stable performance of the Chinese economy.”

But Li insisted his country was comfortable with its economic situation. Li said Beijing has “prepared sufficient tools for us to deal with risks and challenges” and added that “these policy tools will boost China’s resilience to cope with various challenges and difficulties.”

Going forward, the Chinese premier said, his country did not expect to make any major changes to its macroeconomic policy, but would instead be “giving more attentions to preemptive measures and fine tunings.”

‘More harm than good’

Li, who is second-in-command to Chinese President Xi Jinping, did not specifically mention the trade dispute between China and the U.S. but he echoed a frequent Beijing refrain that “free trade” benefits the world overall, and that countries should make decisions together.

“It is essential that we uphold the basic principles of multilateralism and free trade,” he said. “Irrespective of the rooms for improvement for these rules, we believe that these rules have first and foremost benefited the progress of all mankind. And for any existing problems, they need to be worked out through consultation: No unilateralism will offer a viable solution.”

Li said claims that the recent slide of the yuan against the U.S. dollar was an intentional policy decision from Beijing were “simply not true.”

“Persistent depreciation of the RMB will only do more harm than good to our country,” he said, referring to another name for the Chinese yuan. “China will never go down the path of stimulating exports by devaluing its currency, because that will not generate much profits and benefits to China.”

Li’s comments followed increased tensions in the U.S.-China trade dispute in the last 24 hours. The Trump administration announced 10 percent tariffs on $200 billion worth of Chinese goods would take effect Sept. 24, and the rate would rise to 25 percent on Jan. 1, 2019. Beijing responded with 10 percent and 5 percent tariffs on $60 billion worth of U.S. goods.

Earlier in the summer, both countries applied tariffs on $50 billion worth of imported goods from the other country.

On Tuesday, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at a World Economic Forum panel, there was nothing the Trump administration could do to make any significant dent in the Chinese economy.

The worst the U.S. could manage, the regulator said, would be to institute new levies on all of the Chinese goods coming into the world’s largest economy. Such an offensive from Trump would only hit 0.7 percentage points of China’s GDP growth, he forecast, adding that Beijing had ample tools to “cushion” the blow.

“What else can he do? And we are prepared for that,” Fang said.

The regulator added that Trump’s economic policies of lower taxes and deregulation are “simply not going to work” and he suggested Wall Street is poised for a major downturn given its relatively high valuations.

On a broader strategic point, Fang emphasized that his country actually sought to liberalize many of the same parts of its business environment that have attracted U.S. complaints. Still, he predicted, the Trump administration’s approach of public complaint and strong tariff threats would backfire.

“Negotiation cannot be done with this kind of tactics. It might work for some small country – I don’t know. But this doesn’t work on China,” he said, adding that the White House had “poisoned the atmosphere for negotiations.”