China gears for duty fight with U.S.

PREPARING STEPS

unusually high antidumping penalties against a U.S.-made agricultural chemical.

“China has indeed threatened to and is preparing to take steps in retaliation if such actions take place,” said Lester Ross, a board member of the American Chamber of Commerce, at a news conference.

In an implicit rebuke to Trump, Chinese President Xi Jinping emphatically defended free trade in a speech Tuesday at the World Economic Forum in Switzerland. A “trade war” would harm all countries involved, he said.

On Jan. 11, China’s Ministry of Commerce raised duties on DGGS, an additive for livestock feed, to up to 53.7 per cent, nearly double the 33.8-per-cent rate it recommended in September before Trump was elected.

Officials have not said publicly that China is preparing retaliatory measures but state media have emphasized its importance as a market for U.S. soybeans and other exports and warned against starting a “trade war.”

Asked at a Jan. 6 news conference whether Beijing would retaliate by hiking import duties on U.S. goods, a deputy Chinese commerce minister, Wang Shouwen, said, “I believe mutually beneficial Sino-U.S. economic and trade relations will be further developed in the future and no one will destroy the win-win relationship.”

American companies increasingly complain Beijing is blocking access to technology and other promising industries.

While Beijing has promised to open more industries to foreign companies, they also have issued new rules on electric car manufacturing, data security, Internet censorship and other fields.

In a reflection of companies’ concerns, the American chamber’s chairman, William Zarit, said it plans to send seven or eight businesspeople to Washington in February to meet lawmakers and Trump administration officials. Zarit said that is in addition to a delegation that makes an annual visit to Washington in April or May because this year is “special in many ways.”

“We certainly are not going there to lecture the administration but we will share our ideas on a win-win path forward,” Zarit said.

In a report released Wednesday, the chamber said a survey found U.S. firms are increasingly unhappy with what they see as unfair treatment in China.

“We would recommend that the U.S. be more aggressive in talks,” Zarit said. However, he said, “We don’t want to do things that are counterproductive to both countries.”

For their part, European companies also are increasingly frustrated with Chinese trade policy. They complain they are blocked from acquiring assets in China.

On Tuesday, German Ambassador Michael Clauss urged Chinese leaders to make good on promises to open wider to foreign investment and give foreign companies a “level playing field.”