US ‘opening fire’ on world with tariffs
CHINA VOWS TO RETALIATE INSTANTLY IF AMERICAN MEASURES GO INTO EFFECT TODAY
If the US implements tariffs, they will actually be adding tariffs on companies from all countries, including Chinese and US companies.”
The United States is “opening fire” on the world with its threatened tariffs, China warned yesterday, saying no one wants a trade war but it will respond the instant US measures go into effect, as Beijing ramped up the rhetoric in the heated dispute.
The US administration’s tariffs on $34 billion (Dh125 billion) of Chinese imports are due to go into effect at 0401 GMT today, which is just after midday in Beijing.
President Donald Trump has threatened to escalate the trade conflict with tariffs on as much as $450 billion worth of Chinese goods if China retaliates, with the row roiling financial markets including stocks, currencies and the global trade of commodities from soybeans to coal.
China has said it will not “fire the first shot”, but its customs agency made clear yesterday that Chinese tariffs on US goods would take effect immediately after US duties on Chinese goods kick in. Speaking at a weekly news conference, commerce ministry spokesman Gao Feng warned the proposed US tariffs would hit international supply chains, including foreign companies in the world’s second-largest economy.
Gao Feng | China’s commerce ministry spokesman
“If the US implements tariffs, they will actually be adding tariffs on companies from all countries, including Chinese and US companies,” Gao said.
“US measures are essentially attacking global supply and value chains. To put it simply, the US is opening fire on the entire world, including itself,” he said.
“China will not bow down in the face of threats and blackmail and will not falter from its determination to defend free trade and the multilateral system.” Asked whether US companies would be targeted with “qualitative measures” in China in a trade war, Gao said the government would protect the legal rights of all foreign companies in the country.
Chinese President Xi Jinping has an ambitious master plan for his country’s transformation into a wealthy, technology-driven global economic power. And US companies need not apply.
That’s why the current trade rumble between the US and China, in which the Trump administration is threatening to slap tariffs on $34 billion (Dh125 billion) of Chinese imports and Beijing promises to respond in kind, is far more than just a spat over market restrictions, intellectual property rights and the epic US deficit.
On a deeper level, the standoff reflects an escalating economic and military rivalry between a status quo power and one of the most remarkable growth miracles in history. It’s a clash between two divergent systems, (one state-directed, the other market-driven) with markedly divergent world views and national aspirations. That strategic tension seems likely to intensify, regardless of how the brinkmanship over tariffs plays out.
It’s also a battle for global influence. Whereas the US has long sought to spread democracy and free markets to other nations, China’s ruling Communist Party is just starting to pitch its heavyhanded growth model as an alternative for developing nations. And Xi is backing it up with hundreds of billions of dollars in loans for infrastructure projects from Asia to Europe and beyond.
In the US, a bipartisan consensus has begun to emerge that now is the time to stand up to China, even if many oppose President Donald Trump’s tactics. Senate Minority Leader Chuck Schumer, a Democrat, has attacked Trump for not being tougher on China, saying last week that failure to change Beijing’s behaviour now could hurt the US economy “for generations to come.”
Defence
With a roughly $13 trillion economy and expanding wealth, China is now going head-to-head with the US in advanced manufacturing and digital technologies. It also has the wherewithal to make rapid technological progress in defence, particularly with air-to-air missile systems that pose a strategic challenge in Asia for the US and its allies.
Xi is playing a long game, pursuing what he calls the “Chinese Dream,” or “the great rejuvenation of the Chinese nation.” To get there, he has set targets to double his country’s per capita gross domestic product (from 2010 levels) to $10,000 by 2021 and refashion China into a tech powerhouse, competitive in robotics, new energy-vehicles, chips, software and other bleeding-edge industries under his Made in China 2025 programme. A separate development strategy envisions China ruling in artificial intelligence by 2030.
The aim is to produce global champions — not just national ones — and Xi’s government is ready to use the commanding heights of its one-party state to steer subsidies and use preferential policies and ambitious local content rules favouring Chinese companies to get there. At stake are industries that make up about 40 per cent of China’s value-added industrial manufacturing sector, according to an analysis by the US Chamber of Commerce, citing data by the Rhodium Group, a research firm.
China’s push for more selfreliance may reverse the trend toward deeper economic integration with the US that came following China’s accession into the World Trade Organisation in 2001. China is the single largest foreign purchaser of US-manufactured goods — led by transportation, chemicals, computers and electronics — outside of North America, according to the National Association of Manufacturers. Chinese goods have also flooded across American shores, pushing up the US trade deficit with China more than fourfold to $375 billion last year.
The Trump administration views such deficits as alarming and Chinese trade practices as brash mercantilism, even a national security threat. US Defence Secretary Jim Mattis labelled China a “strategic competitor using predatory economics” in January as he unveiled the Pentagon’s National Defence Strategy.