China vows to respond to tariffs with necessary measures

China is urging the United States to 'pull back from the brink' as President Donald Trump's plans for tariffs on up to $60 billion in Chinese goods brings the world's two largest economies closer to a trade war.

BEIJING • China has warned that it was ready to retaliate as the United States prepared to announce sanctions against Beijing for the "theft" of intellectual property, and experts say it could hit back with measures against America's US$140 billion (S$184 billion) of annual exports to the Asian powerhouse.

"China will not sit idly by and let its legitimate rights and interests be harmed, and will certainly take all necessary measures to resolutely defend its legitimate rights and interests," the Commerce Ministry said in a statement yesterday.

Washington has long accused Beijing of forcing US companies to turn over proprietary commercial information and intellectual property as a condition of operating in China.

The US trade deficit with China ran to a record US$375 billion last year - but US exports to the country were also at a record.

US President Donald Trump claims to have built up a generally good relationship with Chinese counterpart Xi Jinping, whom he has praised for his role in pressuring North Korea over its nuclear programme. However, the trade spat threatens to cast a pall over the ties.

Chinese Foreign Ministry spokesman Hua Chunying said it was unfair to throw around criticism about unfair trade if the US will not sell to China what it wants to buy, referring to US export controls on some high-tech products.

"How many soya beans should China buy that are equal to one Boeing aircraft? Or, if China buys a certain number of Boeing aircraft, should the US buy an equal number of C919s?" she said, referring to China's new passenger jet.


How many soya beans should China buy that are equal to one Boeing aircraft? Or, if China buys a certain number of Boeing aircraft, should the US buy an equal number of C919s?


However, China still hopes it can hold constructive talks with the US in a spirit of mutual respect to seek a win-win solution, she added.

To date, China has followed a policy of "strategic composure" in dealing with Mr Trump's America First ethos. If that changes, some potential targets include agriculture - one of the few sectors in the US that runs a trade surplus - and technology, with companies such as Apple and Intel having manufacturing operations in China.

China can quickly throw up non-tariff obstacles to trade, stepping up safety inspections and delaying paperwork essential for goods to enter the country. It is an under-the-radar approach often used to advance its geopolitical goals in Asia.

President Xi's government has already launched a probe into US exports of sorghum, and is studying whether to restrict shipments of US soya beans. Those targets and other crops could hurt Mr Trump's support in some politically important farming states. China can also threaten US companies' access to its government procurement market, which China says is worth 3.1 trillion yuan (S$644 billion).

"If Trump really signs the order, that is a declaration of trade war with China," said Mr Wei Jianguo, former vice-commerce minister and now an executive deputy director of the China Centre for International Economic Exchanges, a government-linked think-tank.

"China is not afraid, nor will it dodge a trade war," Mr Wei said.

"We have plenty of measures to fight back, in areas of automobile imports, soya bean, aircraft and chips. On the other hand, Trump should know that this is a very bad idea, and there will be no winner, and there will be no good outcome for both nations."


A version of this article appeared in the print edition of The Straits Times on March 23, 2018, with the headline 'China vows to respond to tariffs with necessary measures'. Print Edition | Subscribe