Respect trade rules, China tells US after Trump's exec orders

US President Donald Trump signs executive orders on trade that he says will set the stage for revival in American manufacturing.

US action aimed at possible abuses causing large trade deficits, stopping import-duty evasion

BEIJING • China has urged the United States to respect international trade rules and improve cooperation and dialogue, in response to two new orders by US President Donald Trump calling for an investigation into trade abuses.

Any US trade enforcement measures should comply with generally accepted international trade rules and differences between the two countries should be handled properly, an unidentified spokesman for China's Ministry of Commerce said in a speech on Saturday.

"China is willing to cooperate with the United States on a basis of equality and mutual benefit," the spokesman said in the speech released on the ministry's website.

Mr Trump signed executive orders last Friday aimed at possible abuses causing large US trade deficits and also at stopping import-duty evasion. Attention has focused on the massive trade deficit with China - US$347 billion (S$485 billion) in 2016, almost half of the US total. But China, with its 1.37 billion people, is also among the top three export markets for 33 states.

"From now on, those who break the rules will face the consequences, and there will be very severe consequences," Mr Trump said.

Throughout his presidential campaign, Mr Trump vowed to put America's trading relationship with the world on a more advantageous basis and put "America first".

His moves are being seen as a protectionist warning shot a week before he hosts Chinese President Xi Jinping this Thursday and Friday at his Mar-a-Lago retreat in Florida. During the meeting, trade is expected to be a central talking point as well as North Korea and China's ambitions in the South China Sea.

Mr Trump, who takes a harsh stance on China's trade practices, said last week the meeting "will be a very difficult one", citing massive trade deficits and US job losses.

Beijing has maintained that the China-US trade imbalance is mostly the result of differences between the economic structures and development stages of the two countries.

The economic ties that bind China to the US are primarily regional and run deep. Now, with a wild card in the White House, the Chinese want even more leverage should bilateral trade relations get hammered.

China's Ministry of Commerce says it is working to expand various investment agreements with California, Texas, Iowa and other states, deals it estimates were worth US$2.5 billion to US and Chinese businesses in 2016 alone.

"A good relationship between two nations is based on close connection between their peoples," said Mr Sun Jiwen, a spokesman for the ministry, citing an old Chinese saying.

"Province-state and intercity economic partnerships provide an important foundation for China-US economic ties."

While the outreach is a continuation of regional ties promoted for several years by Mr Xi, it has taken on added urgency as Mr Trump's economic team weighs whether to follow through on campaign-trail promises of tariffs of as much as 45 per cent on Chinese goods.

Texas oil and gas producers, Michigan automakers and Georgia paper mills would all suffer if China were to impose import restrictions in response to American tariffs. China has also ramped up its investments in the US - by one estimate, they tripled last year to US$45.6 billion - which help create the jobs Mr Trump has promised.

Part of Beijing's thinking is that making more American friends outside Washington could slow the push for protectionist measures, according to a person involved in Chinese Ministry of Commerce's campaign who asked not to be identified.

If such cooperation flourishes, "it will not be easy for anyone to shake", said Mr He Weiwen, a former ministry official who is now deputy director of the Beijing-based Centre for China and Globalisation.

REUTERS, AGENCE FRANCE-PRESSE, WASHINGTON POST

A version of this article appeared in the print edition of The Straits Times on April 03, 2017, with the headline 'Respect trade rules, China tells US after Trump's exec orders'. Print Edition | Subscribe