US will learn a painful lesson, say Chinese state media

SHANGHAI • Chinese state media hailed their leaders' quick counter-offensive in the brewing trade war with the United States, and said America would learn a painful lesson by tangling with China.

The articles and editorials across the Communist Party's media stable emphasised that China was acting only in self-defence, and that the Trump administration's move to levy a 25 per cent tariff on about 1,300 types of Chinese imports was opposed by many in the US.

"As China deploys its counter-attack, the pleasure that the US achieved from those tariffs will now cause them suffering as their financial and political gains diminish to zero," the Global Times wrote in an editorial yesterday.

The paper, which sometimes takes more hawkish positions, has run five editorials on the trade issue since Monday.

China said on Wednesday that it would levy an additional 25 per cent tariff on about US$50 billion (S$65.7 billion) of US imports, matching the scale of proposed US tariffs unveiled the day before. Beijing retaliated with a list of duties on key US imports including soya beans, airplanes and cars.

The US is allowing 60 days for public feedback, leaving room for talks. China has said its tariffs will take effect when the US ones do.

The People's Daily, the Communist Party's mouthpiece, hailed the quickness of China's reciprocal tariffs, saying that "China showed its sword in less than 24 hours with a reaction that even the Americans must not have anticipated".

It devoted three pages in yesterday's edition to coverage of the tit-for-tat tariffs.

It said that Sino-US ties were no longer that of David and Goliath, but of two equally matched giants, and that President Donald Trump's incitement of a trade war was out of step with global sentiment.

The Global Times said China had more weapons in its arsenal to deploy against the US in the event of a trade war. It could devalue its currency or promote the yuan as an alternative to the dollar in the global financial system.

A China Daily editorial said Beijing is willing to talk and strike a mutually agreeable balance in bilateral trade. "But Washington should not mistake that for weakness. (China) will continue trading blows if forced to do so," it said.

A small but vocal online community is calling for a boycott of US goods such as Boeing planes, Apple products and US graduate schools. Some even said they could do what Chinese shoppers had done to South Korea over the disagreement of Seoul's deployment of the US-made Terminal High Altitude Area Defence anti-missile system.

That disagreement prompted an undeclared Chinese boycott of products ranging from South Korean cosmetics to cars, and was estimated to have knocked about 0.4 percentage point off South Korea's expected economic growth last year.

Rabobank said that in the current trade tensions between the US and China, if the US tariffs took effect, they would shave 0.25 percentage point off China's GDP growth, and 0.13 point off the US side if the Chinese tariffs were implemented.

The 0.25 percentage point is limited, Rabobank senior economist Hugo Erken told The Straits Times, as China's GDP is projected to grow by 6.5 per cent.

China Jianyin Investment, the equity investment group from China Construction Bank, said it will avoid the US market in its pursuit of overseas technology acquisitions, focusing on Germany and other parts of Europe instead.

Fearing a fallout, policymakers across South-east Asia, including Indonesia, are turning their focus on bolstering their domestic markets. South Korea said it has measures for various scenarios for a potential fallout.

BLOOMBERG, REUTERS

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A version of this article appeared in the print edition of The Straits Times on April 06, 2018, with the headline 'US will learn a painful lesson, say Chinese state media'. Print Edition | Subscribe