BEIJING: China will actively take steps to safeguard its interests as well as those of its industries, Vice Commerce Minister Wang Shouwen said, in light of what he described as acts of trade protectionism by the United States.
The U.S. decision to launch trade investigations is a unilateral act of protectionism, the Chinese commerce ministry said in a statement on Wednesday, citing a speech by Wang in New Delhi.
President Donald Trump is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday.
The tariffs will be imposed under Section 301 of the 1974 U.S. Trade Act, following an intellectual property probe that began in August last year.
“Taking trade restrictive measures will not only impede normal international trade order but also cause serious damage to the multilateral trade system,” Wang said at a two-day World Trade Organization ministerial meeting that ended on Tuesday.
Trump has accused the Chinese government of forcing U.S. companies to transfer their intellectual property to China as a cost of doing business there.
Voicing hopes that Beijing and the United States could avoid a trade war, Premier Li Keqiang said on Tuesday that China would open its economy further, so that foreign and Chinese firms can compete on an equal footing.
But one day later, Chinese tabloid Global Times said in an editorial that U.S. subsidies for its soybean farmers have given them an unfair competitive advantage in selling to China and strong restrictive measures need to be taken to prevent dumping.
While the widely-read paper is run by the ruling Communist Party’s People’s Daily, its stance does not necessarily equate with Chinese government policy.
“The (U.S.) president is willing to negotiate and he wants to put all the chips on the table, probably put some people on their heels,” Reince Priebus, a former Trump White House chief of staff, told Reuters in an interview in Hong Kong.
NOT SCARED OF A TRADE WAR
Speaking at a daily news briefing, Foreign Ministry spokeswoman Hua Chunying reiterated that China would hit back if needed.
“China does not want to fight a trade war with anyone. But if anyone forces us to fight one, we will neither be scared nor hide,” Hua said.
“If, in the end, the United States takes actions that harm China’s interests then China will have to take resolute and necessary steps to respond to protect our legitimate interests.”
Expectations of tariffs on some Chinese goods have alarmed dozens of U.S. business groups, who said they would raise prices for consumers, kill jobs and drive down financial markets.
Fears of a global trade war have risen after Trump imposed hefty import tariffs on steel and aluminum earlier this month under Section 232 of the 1962 U.S. Trade Expansion Act, which allows safeguards based on “national security”.
The move provoked strong protests from U.S. allies, including South Korea, Japan and Canada.
“(Trump’s) not going to dial back from his default position, which is a reciprocal tax, but I think one by one, based on the conversations each of these countries is going to have with him, I think he’d be willing to negotiate,” Priebus said.
In a “field guide” on a potential China-U.S. trade war, S&P Global Ratings said any retaliation by major U.S. trading partners will derail a synchronized global economic recovery.
In any case, China’s trade openness and its reliance on trade for GDP growth both peaked over decade ago, and China’s growth story is increasingly a domestic one, the ratings agency said.
S&P has an A+ rating on China, on par with ratings from Moody’s Investors Service and Fitch.
Fitch Ratings on Wednesday affirmed its China rating, but said heightened trade tensions with the United States pose a downside risk to the ratings agency’s baseline outlook.—Reuters