© Aly Song
Workers ride on an motor rickshaw through an aluminium ingots depot in Wuxi, Jiangsu province.
China is readying itself for a trade war with the US as Washington reportedly plans to announce new measures against Beijing within days. Officials have been seeking support from other nations and world trade bodies.
US media reports have claimed the White House was preparing punitive measures, including tariffs on Chinese technology and telecoms commodity imports valued at $60 billion, to be a announced on Friday.
That was despite the much-vaunted rapport between US President Donald Trump and China's Xi Jinping, following the former's state visit to Beijing last year. A fortnight ago, Trump announced tariffs on steel and aluminum imports, hitting the EU, Japan and South Korea, as well as China.
"The Chinese side never wants to fight a trade war with anybody, but if we are forced to, we will not hide from it," Foreign Ministry spokeswoman Hua Chunying warned on Wednesday. Beijing will "definitely take firm and necessary countermeasures to defend its legal rights," she said, as quoted by China's
Global Times.
Comment: Trump then
announced the $60 billion tariff package, aimed at curbing "intellectual property theft":
Trump has signed a Section 301 trade action with China that could be about $60 billion in tariffs, he said adding that he asked China to reduce trade surplus immediately by $100 billion.
"We have right now an $800 billion dollar trade deficit with the world," he said before signing a memorandum. "It is the largest deficit of any country in the history of our world. It's out of control."
"We're gonna get it taken care of. Frankly it's going to make us a much stronger, much richer nation."
"Just use the reciprocal. If they charge us, we charge them the same thing."
Washington is targeting more than 100 types of Chinese goods, from clothing to electronics. The value of the tariffs is based on US estimates of economic damage caused by intellectual-property theft by China, an anonymous source familiar with the matter told Bloomberg.
The announcement comes after the Trump administration accused China of "state-led, market-distorting efforts to force, pressure, and steal US technologies and intellectual property," according to a statement by principal deputy press secretary Raj Shah on Wednesday.
China's response? A "
fight to the end" using "all necessary measures":
In the statement, China's US Embassy said the country doesn't want a trade war, but "will not recoil from one" should it come to it. It also accused the US of "ignoring rational voices," and of disregarding "the mutually-beneficial nature of China-US trade relations and the consensus reached by the two countries of managing differences constructively through consultations."
"If a trade war were initiated by the US, China would fight to the end to defend its own legitimate interests with all necessary measures," it added. China strongly opposes what it described as a "typical unilateral trade protectionist action" taken by the Trump administration on Thursday. It said the US action will "directly harm the interests of US consumers, companies, and financial markets."
The embassy urged the US to "cease and desist, make conscious decisions and avoid placing China-US trade relations in danger," as it could "end up hurting itself."
...
"I have tremendous respect for President Xi," Trump said, after signing the new measures on Thursday. "We have a great relationship. They're helping us a lot in North Korea and that's China. But we have a trade deficit, depending on the way you calculate, of $504 billion."
"It is the largest deficit of any country in the history of our world. It's out of control," he added. "We're gonna get it taken care of. Frankly it's going to make us a much stronger, much richer nation."
US stocks dropped after Trump's announcement. The Dow Jones industrial average fell 722 points, almost 3 percent, and the Nasdaq fell 2.4 percent. Shares in US exporters, including Boeing, also dropped, on foot of the feared trade war with China.
But the Trump team has a counter-proposal: buy more American LNG, get
fewer tariffs:
"China needs to import very, very large amounts of LNG and, from their point, it would be very logical to import more of it from us, if for no reason other than to diversify their sources of supply," said US Secretary of Commerce Wilbur Ross in an interview with Bloomberg. "It would also have the side effect of reducing the deficit."
...
However, Washington's demand for China to buy more American gas is unlikely to cut the deficit, according to a Bloomberg-polled analyst Anastacia Dialynas. Beijing has commitments with other countries, and only 40 million tons of China's 2030 imports aren't already under contract, which accounts only for $13.5 billion at current prices.
Comment: Trump then announced the $60 billion tariff package, aimed at curbing "intellectual property theft": China's response? A "fight to the end" using "all necessary measures": But the Trump team has a counter-proposal: buy more American LNG, get fewer tariffs: