US 'capricious' trade actions will hurt its workers, China warns

Cranberry harvest in Massachusetts. The cranberry sector is among those hit by China's tariffs on commodities in response to actions by the Trump administration.
Cranberry harvest in Massachusetts. The cranberry sector is among those hit by China's tariffs on commodities in response to actions by the Trump administration.PHOTO: REUTERS

Beijing fully prepared to respond in strong manner to tariff threats

BEIJING • China's commerce ministry yesterday accused the US of being "capricious" over bilateral trade issues, warning that the interests of US workers and farmers ultimately will be hurt by Washington's penchant for brandishing "big sticks".

Previous trade negotiations with the United States were constructive, but Beijing has had to respond in a strong manner due to the US tariff threats, 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 US has accused China of stealing US intellectual property, a charge Beijing denies.

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, Mr Gao told a regular briefing in Beijing.

China could hit back at US firms listed on the Dow Jones Industrial Average if Mr Trump keeps heightening tension with Beijing over trade, state-controlled Chinese tabloid Global Times said yesterday.

The 30-stock Dow, which counts Boeing, Apple and Nike among its constituents, fell 0.17 per cent on Wednesday and has declined 0.25 per cent this year. By contrast, China's benchmark Shanghai Composite Index has slumped 13.1 per cent year-to-date.

"It is deeply regrettable that the US has been capricious... escalated the tensions, and provoked a trade war," Mr Gao said. "The US is accustomed to holding 'big sticks' for negotiations, but this approach does not apply to China," he added.

"US unilateral protection measures will ultimately harm the interests of US companies, workers and farmers," Mr Gao told reporters.

White House trade adviser Peter Navarro, who views China as a hostile economic and military power, said on Tuesday that Mr Trump's actions were a necessary defence of the "crown jewels" in the US economy.

None of the US administration's efforts to negotiate with Beijing had yielded progress on changing China's "predatory"trade practices, he said.

Fending off criticism from some Western countries, China has said it is willing to boost imports and widen market access.

In April, President Xi Jinping told a high-profile Chinese forum that import tariffs would be cut on goods such as cars, among other promises.

In May, Beijing said it would lower import tariffs on 1,449 consumer goods, starting from July 1.

"I've been honouring my words with actions," Mr Xi told a group of foreign chief executives in Beijing yesterday.

Mr Xi said countries should not fight among themselves, but instead cooperate and meet challenges together, adding that the last global financial crisis happened not too long ago.

"We still have vivid memories of what happened during the financial crisis and we are not yet fully recovered," he said.

"We must also stay vigilant because as economic growth still lacks momentum, we have seen a surge of trade protectionism, isolationism and populism."

Three rounds of high-level talks since early May failed to reach a compromise on US complaints over Chinese practices and its record deficit with China.

Chinese shares fell yesterday on investor worries about the trade dispute, with the Shanghai index languishing at a two-year low and stocks of about 100 firms down by the daily limit of 10 per cent.

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 22, 2018, with the headline 'US 'capricious' trade actions will hurt its workers, China warns'. Print Edition | Subscribe