Trade war brews between US, China
MAKE PRUDENT DECISIONS, BEIJING WARNS TRUMP President’s planned penalty on hold for ‘discussions’.
China urged the US yesterday to “pull back from the brink” as President Donald Trump’s plans for tariffs on up to $60 billion (R705 billion) in Chinese goods moved the world’s two largest economies closer to a trade war.
The escalating tensions between Beijing and Washington sent shivers through financial markets as investors foresaw dire consequences for the global economy if trade barriers start going up.
Trump is planning to impose the tariffs over what his administration says is misappropriation of US intellectual property. A probe was launched last year under Section 301 of the 1974 US Trade Act.
“China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the Chinese commerce ministry said in a statement.
“China hopes the US will make prudent decisions and avoid dragging bilateral trade relations to a dangerous place.”
In a presidential memorandum signed by Trump on Thursday, there will be a 30-day consultation period that only starts once a list of Chinese goods is published.
That effectively creates room for potential talks to address Trump’s allegations on intellectual property theft and forced technology transfers.
Although the White House has said the planned tariffs were a response to China’s “economic aggression”, Trump said he views China as “a friend” and both sides are in the midst of negotiations. A Chinese commerce ministry official said both sides were in touch.
Meantime, China showed readiness to retaliate by declaring plans to levy additional duties on up to $3 billion of US imports, including fresh fruit, wine and nuts, in response to imports tariffs Trump announced earlier this month on steel and aluminium.
The inevitable fall in demand from a full-blown trade war would spell trouble for all the economies supplying the United States and China. –