China ready to retaliate on trade

Beijing foreshadows a wave of new tariffs on American imports, in response to Donald Trump’s 25 per cent levy.

A shopper passes a US apparel store in Beijing yesterday. Picture: AP

Beijing yesterday foreshadowed a wave of tariffs on American goods in response to US President ­Donald Trump’s announcement of a 25 per cent levy on Chinese exports worth $US60 billion a year.

China’s tariffs, covering 120 categories of imports, will include 15 per cent on steel pipes, wine, nuts and fresh fruit, and 25 per cent on live hogs and recycled aluminium. The US items to be hit by China are worth up to $US3.9bn a year.

The Commerce Ministry, which has prepared for action since Mr Trump called for tariffs during the 2016 election campaign, said: “Ignoring the rules of the World Trade Organisation and ­ignoring the appeal of the broad business community, the US has decided to go it alone.”

China, it said, would apply “firm and necessary” countermeasures if necessary. “China does not want a trade war, but China is not afraid of a trade war. We are confident in our capability to face up to any challenge.”

China’s ambassador to the US, Cui Tiankai, told China Central TV that the country would “fight to the very end, and we shall see who will be the final winner”.

He said China would “do our best to protect our legitimate rights and to maintain world trade order”.

In the long run, he said, China would by continuing to champion global trade rules that act in America’s ultimate best interests too.

Mr Cui said the US should ­realise the world has changed. It was arrogant, he said, to believe that it alone should own and control new technology. But he pledged that the leaders of the two countries would maintain direct lines of communication.

Many voices inside China, however, called for sterner retaliation. One of the Commerce Ministry’s most senior researchers, Mei Xinyu, said “China should launch an epic trade war against America”. China’s strategy, Dr Mei said, should be “to apply a precision attack, aimed at the key ­industries in the states that supported Trump in the election, and in the states whose senators are supporting Trump”.

China should also, he said, fight back not only via commodity trade but through the financial sector, “given that Trump often boasts about the rise on stock prices since his election”.

And China “should seek to kick the US out of the WTO”, he said, “rather than get bogged down in everlasting negotiations”.

“China’s counter-fight should include the political sphere, including Korean peninsula affairs.”

A Xinhua commentary said Mr Trump’s revival of “zombie trade measures” effectively “returns international trade to the jungle” and severely threatened the recovery of the world economy.

Global Times editorialised that “China is ready for trade war! Boeing and soybean will be the two imports most immediately affected.”

“The US is pushing its allies ­towards China, since all other countries are closely related to China by trade. A storm is coming, and China is ready!”

ANZ researchers Raymond Yeung and Daniel Wilson said while Chinese authorities would “stand firm as advocates for globalisation” they would not devalue the yuan.

“The pressure from the US will push China to upgrade its economy, and the ideal point of focus is to shift its employment structure from manufacturing to domestic services,” they said.

Chinese Foreign Ministry spokeswoman Hua Chunying said that “the right way to solve the trade imbalance is to open the market wider to each other, and make the pie of bilateral co-operation bigger, instead of launching trade wars”.

Editorial P25