US trade sanctions will hit world economy: China

A steel plant in Hangzhou, in China's Zhejiang province. China produces around half of the world's steel but stands accused of "dumping" cheap steel on global markets to gain market share.
A steel plant in Hangzhou, in China's Zhejiang province. China produces around half of the world's steel but stands accused of "dumping" cheap steel on global markets to gain market share.PHOTO: REUTERS

Warning comes after Trump threatened retaliatory action against China and S. Korea

BEIJING, WASHINGTON • US trade sanctions will hit the world economy, Beijing warned yesterday, after US President Donald Trump threatened retaliatory action against two of its major Asian trading partners on Tuesday, warning of sanctions against China while vowing to revise or scrap a free trade deal with South Korea.

Mr Trump said he was "considering all options", including tariffs and quotas, after he accused China of decimating the American steel and aluminium industries.

He recently received two Commerce Department reports concerning alleged Chinese subsidies for steel and aluminium exports - materials that are vital for industries from construction to cars.

"I will make a decision that reflects the best interests of the United States, including the need to address overproduction in China and other countries," he said.

Washington has already imposed a range of tariffs on Chinese-made goods, sparking fears of a tit-for-tat trade war between the world's top two economies as China also threatens to take action.

Foreign Ministry spokesman Geng Shuang told reporters that "any sign of unilateralism or protectionism will... worsen global trade issues and will hurt the recovering momentum of the world economy".

He added that with the sheer volume of trade and integration between the US and Chinese econo-mies, some friction was natural.


However, "China always regards the US as an important cooperation partner in trade and economy, and we hope we will continue to open our respective markets wider", Mr Geng said.

The Trump administration has two months to decide whether to take action on Chinese alumi-nium, steel and intellectual property practices. China produces around half of the world's steel but stands accused of "dumping" cheap steel on global markets to gain market share.

The two countries have already begun trading sanctions in what China's Commerce Ministry war-ned could become a "vicious circle". On Monday, Beijing announced it had taken aim at imports from the US of styrene, a key chemical in the manufacture of styrofoam. Last week, it launched an anti-dumping investigation into sorghum imports from the US, worth almost US$1 billion (S$1.32 billion) last year.

The measures come a month after the Trump administration slapped new tariffs on Chinese-made solar panels and washing machines, the most recent in a series of trade cases that have rattled Beijing.

Taking aim at Seoul, Mr Trump complained that America's 2012 free trade deal with South Korea "was a disaster", vowing that the US would renegotiate a "fair deal" or scrap it altogether.

The Trump administration initiated talks to renegotiate the United States-Korea trade agreement in July last year, arguing it was lopsided because America's bilateral trade deficit had ballooned under it.

Yesterday, South Korea's Trade Ministry said it will take a dispute to the World Trade Organisation (WTO) against the US for imposing high anti-dumping duties on its steel and transformers.

The move comes after the US in May 2016 slapped anti-dumping duties on Korean steel products and transformers of up to 60.81 per cent by applying the Adverse Facts Available (AFA) provision.

The ministry said applying AFA rules allowed the US to unfairly levy high anti-dumping duties without thoroughly verifying data available to them.

The Trade Ministry said in a statement that it will request a bilateral discussion with the US under the WTO agreement and notify the WTO.

AGENCE FRANCE-PRESSE, REUTERS

A version of this article appeared in the print edition of The Straits Times on February 15, 2018, with the headline 'US trade sanctions will hit world economy: China'. Print Edition | Subscribe