US, China firms brace for trade war
COMPANIES and trade groups in the US and China have expressed concern over how the escalating trade spat between the world’s two biggest economies could affect operations.
Beijing retaliated immediately to tariffs on tens of billions in Chinese imports imposed by US President Donald Trump on Friday, igniting a trade war that threatens to cut into the pair’s massive bilateral trade – potentially harming exporters and US multinationals keen on China’s huge market.
Top among American products hit with duties by China are agricultural exports, with soybeans, sorghum, oranges, pork, poultry and beef included in the $34 billion in goods targeted for higher border taxes starting next month.
Agricultural trader Cargill, the largest US private company, called for dialogue between Beijing and Washington so businesses, farmers and consumers would not be caught up in an all-out trade war.
“Trade conflict . . . will lead to serious consequences for economic growth and job creation and hurt those that are most vulnerable across the globe,” said Devry Boughner Vorwerk, a vice president at Cargill.
A spokeswoman for grain trader Archer Daniels Midland also said bilateral dialogue should be pursued, adding that China “continues to be an important export market for American food and agriculture”.
Friday’s announcements cap months of sometimes fraught shuttle diplomacy between Washington and Beijing, in which Chinese offers to purchase more US goods failed to assuage Trump’s grievances over a soaring trade imbalance and the country’s industrial development policies.
Beijing has left the door open to negotiations, even as it matched Washington with tariffs and bellicose rhetoric.
“The Donald Trump administration has once again proved inconsistent and precarious,” state-run newspaper China Daily said in an editorial on Saturday.
It added that given the “frequent flipflopping” in the US, “it is still too early to conclude that a trade war will start”.
US trade groups also stepped up their criticism, while some large companies such as Boeing said they were beginning to evaluate the tariffs’ possible effects.
Boeing garnered about 12.8 percent of its 2017 revenues from China and is frequently seen as among the more vulnerable US multinationals to a full-on trade war.