FLIP-FLOP SLAMMED

Companies uneasy about Trump threat

China accuses the Trump administration of acting erratically on trade.

BEIJING: China’s government accused the Trump administration of hurting its credibility by acting erratically on trade and vowed yesterday to fight back if Washington goes ahead with a threatened tariff hike.

A Foreign Ministry spokeswoman said the US decision to renew a threat to raise duties on a $50 billion list of Chinese goods conflicted with an agreement in mid-May aimed at settling that dispute.

Treasury Steven Mnuchin said then the conflict was “on hold’’ after Beijing promised to buy more US goods to help narrow its multibillion-dollar trade surplus with the United States.

The spokeswoman, Hua Chunying, declined to say whether Tuesday’s announcement might disrupt plans for Commerce Secretary Wilbur Ross to visit Beijing on Saturday for more talks.

She gave no indication whether Beijing planned to act on its own threat to retaliate by raising duties on a $50 billion list of American goods including beef and soybeans.

“Every flip-flop and U-turn of a country will be simply depleting and squandering its own credibility,’’ Hua said at a regular briefing. “We do not want a trade war, but we are not afraid of one. We will fight back. We will definitely take forceful measures to defend our legitimate interests.’’

The White House announcement said on Tuesday it also would impose curbs on Chinese investment and purchases of hightech exports.

The latest tariff action focuses on advanced technologies, including those such as robots and electric cars that China has said it wants to develop under its “Made in China 2025’’ programme.

The White House said a list of products would be announced on June 15.

“Trump’s surprise announcement reflects his frustration at criticism of his earlier deal with Beijing,’’ political risk consultancy Eurasia Group said in a report.

“He appears less concerned that he needs Chinese support for his proposed meeting with North Korean leader Kim Jong-un.

“Trump is going on offence, reverting to his earlier instincts on China and reempowering the trade hawks in his cabinet,’’ Eurasia said. “This dynamic makes it likely that both tariffs and investment restrictions will go into effect.’’

The American Chamber of Commerce in China said companies were uneasy about the threat of export and investment controls but saw them as a possible way to make progress on longstanding complaints about market access and investment curbs.

“As a result of Trump’s tariff threat, Washington is in very intense negotiations with Beijing in a way that we haven’t been for so many years,’’ said the chamber chairman, William Zarit.

“Companies hoped Beijing can be persuaded to level the playing field by easing curbs on foreign investment and business activity in its state-dominated economy.

“I wouldn’t say we are in favour of, specifically, export controls, investment restrictions,’’ he said at a news conference.

But Zarit said American companies wanted equal treatment, “and this seems to be one of the ways to do that.’’

“The tariff threat is a very powerful negotiating tactic,’’ said Lester Ross, chairman of the chamber’s policy committee.

However, he said tariffs were a tax on American consumers and a blunt tool to address “very complex problems that hamper trade and investment relationships.’’

Analysts in the United States suggested the newly confrontational stance also might be aimed at appeasing congressional critics of a deal the Trump administration made on Friday that allowed Chinese telecom giant ZTE Corp to stay in business.

ZTE agreed to remove its management team, hire American compliance officers and pay a fine. That would be on top of a $1 billion penalty the company paid for selling high-tech equipment to North Korea and Iran in violation of US sanctions.

In return, the Commerce Department lifted a seven-year ban on ZTE’s purchase of US components that it imposed earlier in May.

Trump said last month that the ban threatened too many Chinese jobs and he wanted to get the company back in business.