China hates to be engaged in trade war but will firmly defend national interests

The Trump administration on Friday unveiled plans to impose additional 25 percent tariffs on Chinese goods worth around $50 billion, the latest unilateral move to risk provoking a trade war between the world’s top two economies that could damage the global economy and trading system.

The move drew immediate opposition from the US business community, farm groups, technology associations and pro-trade lawmakers of Trump’s Republican Party.

Senate Finance Committee Chairman Orrin Hatch warned that “tariffs will harm American and Chinese businesses and consumers, and will put economic growth in both countries at risk.”

Since early May, China and the US have conducted three rounds of economic and trade consultations, trying to settle disputes for a win-win result, and have made positive and concrete progress.

However, the chaos and division in the Trump administration has sent mixed messages and demonstrated flip-flops on major trade issues with China.

Hardliners in the Trump administration might want to use tariffs to bully China into unilateral trade concessions, in disregard of the consensus recently reached by the two sides. But trade is not a zero-sum game and China will not negotiate with a gun held to its head.

China hates to be engaged in a trade war with the US, knowing that it would be a lose-lose game for both.

But this does not mean that Beijing is going to sit quietly in the face of Washington’s planned unilateral tariffs. China has to fight back forcefully so as to safeguard the interests of the nation and its people.

This is also a clear-cut demonstration of China’s firm stance to uphold the rulesbased multilateral trading system.

In fact, Beijing has been ready for a volatile Washington. In a statement issued in the wake of their most recent trade negotiations in Beijing earlier this month, China made it clear that all outcomes of the economic and trade talks would not take effect if the US side imposed any trade sanctions including raising tariffs.

China always means what it says. Shortly after Washington’s announcement on Friday, China decided to impose additional duties on US products with the same scale and intensity, as the US latest move violates WTO rules.

Earlier this year, the Trump administration had unilaterally imposed tariffs on steel and aluminum imports as well as imported solar panels and washing machines, based on outdated US trade laws put in place during the Cold War era.

These measures sparked strong opposition from America’s domestic business community and major trading partners. The EU, Canada, Mexico and several other countries have recently announced retaliatory measures against US steel and aluminum tariffs.

The IMF has also warned that the new US tariffs against imports could interrupt global supply chains and damage a range of countries as well as the operations of US multinational companies, putting the rulesbased global trading system in serious jeopardy.

The “America First” doctrine and unilateralism seem to be the mantra of the Trump administration’s trade policy. Unfortunately, with a zero-sum mentality and a fickle approach to policy, it is hard to see how the US, with an ever evaporating credibility, can negotiate better trade deals with other countries.

For free traders worldwide, it is never an option to accommodate Washington’s unilateral and protectionist measures with further concessions as it would only prompt the trade hawks in Washington to demand an even higher price.

Now it is time for China, the EU, Canada and other countries to jointly safeguard the multilateral trading system with WTO at its center and to defend the common interests of the wider international community.