China warns Washington’s trade actions will hurt US workers, farmers

Numbers and figures displayed on a screen after the closing bell of the Dow Industrial Average at the New York Stock Exchange, on June 19, 2018, in New York.
Numbers and figures displayed on a screen after the closing bell of the Dow Industrial Average at the New York Stock Exchange, on June 19, 2018, in New York. PHOTO: AFP

BEIJING (REUTERS) - China’s commerce ministry on Thursday (June 21) accused the United States of being temperamental over bilateral trade issues, and warned that the interests of US workers and farmers ultimately will be hurt.

China believes its previous trade negotiations with the United States were constructive, but because the US government is being unpredictable and challenging, Beijing has had to respond in a strong manner, commerce ministry spokesman Gao Feng said.

President Donald Trump threatened on Monday to hit US$200 billion (S$272 billion) of Chinese imports with 10 per cent tariffs if Beijing retaliates against his previous announcement to target US$50 billion in imports.

The United States has alleged that China is stealing US intellectual property, a charge denied by Beijing.

Washington’s accusations of forced tech transfers are a distortion of reality, and China is fully prepared to respond with “quantitative” and “qualitative” tools if the US releases a new list of tariffs, Gao said.

Financial markets are worried of an open trade conflict between the world’s two biggest economies after three rounds of high-level talks since early May failed to reach a compromise on US complaints over Chinese practices and a US$375 billion trade deficit with China.

A Sino-US trade war could disrupt global supply chains for the tech and auto industries, sectors heavily reliant on outsourced components, and derail world growth.

China said it will impose additional tariffs on 659 US goods, with duties on 545 of them to kick in on July 6, after Trump said Washington will impose tariffs on US$50 billion of Chinese products.

The US goods affected on July 6 include soybeans, fruit, meat products such as pork, autos, as well as marine products.

Beijing has yet to announce an activation date for its tariffs on the remaining 114 US products, which include crude oil, coal and a range of refined fuel products.

China will take action to defend its interests, and US unilateralism will ultimately damage the interests of its own workers and farmers, Gao told reporters.

Beijing could hit back at US firms listed on the Dow Jones Industrial Average if Trump keeps exacerbating tensions with China over trade, state-controlled Chinese tabloid The Global Times said on Thursday.

The Dow, which counts Boeing Co, Apple Inc and Nike Inc among its constituents, ended down 0.17 per cent on Wednesday. The 30-stock share index has declined 0.25 per cent year-to-date.

"If Trump continues to escalate trade tensions with China, we cannot rule out the possibility that China will strike back by adopting a hard-line approach targeting Dow Jones index giants," the Global Times said in a commentary.

The world's two biggest economies seemed increasingly headed towards open trade conflict after three rounds of high-level talks since early May failed to reach a compromise on US complaints over Chinese trade practices and a US$375 billion trade deficit with China.

Despite taking steps in self-defence, China will not stray from its path of deepening reform and opening up, said the tabloid, which is run by the People's Daily.

"Beijing will further open up China's financial markets to the world, a move that may draw funds from US stock markets as global investors increasingly add Chinese stocks to their portfolios," it said. "Those measures may further knock down US stock prices."

White House trade adviser Peter Navarro, who views China as a hostile economic and military power, said on Tuesday that Beijing had more to lose from a trade war.

China imported US$129.89 billion of U.S. goods last year, while the United States purchased US$505.47 billion of Chinese products, according to US data.