China squares up to Trump over $60bn tariff move

Beijing says it won’t sit idly by as US president Donald Trump introduces tariffs

US president Donald Trump holds his signed memorandum on intellectual property tariffs on high-tech goods from China, at the White House

US president Donald Trump holds his signed memorandum on intellectual property tariffs on high-tech goods from China, at the White House

 

China took a firm line against Donald Trump’s package of $60 billion (€49 billion) in tariffs on Chinese products, saying it would strike back against Washington and had no intentions of sitting idly by as the US started a trade war.

The initial response came from the commerce ministry in Beijing, urging the US to “pause at the brink of a precipice” after Mr Trump fired what could the opening salvo in a trade war in response to allegations of intellectual property theft by China.

Chinese citizens took to social media to register their backing for a resolute response to Mr Trump’s package of tariffs.

“I want to prove my patriotism with action, so I decided not to buy the iPhone X. I won’t let them make any money. Look at what happened to Lotte Mart,” wrote Liang Wei on Weibo, referring to the South Korean chain which saw its China business collapse after trade tensions between Beijing and Seoul.

Yuxuan Lin wrote on Weibo: “Free trade maximises the benefits for both countries. Now America wants to start the war from their side, it will bring harm to both countries.”

On the same social media platform, Deverbing wrote: “America is trying all kinds of ways to stop China from developing and they are scared of China becoming stronger and are trying to suppress China. It is very stupid behaviour, even shameless.”

Mr Trump’s package of tariffs caused major jitters on the world’s stock markets, with Japan’s Nikkei share index falling 4.5 per cent and the Dow Jones index also down sharply. In China, Shanghai Composite Index ended 3.4 per cent down, while Hong Kong’s Hang Seng index closed down 2.5 per cent.

The commerce ministry described the US action as a “very bad precedent” that went against “the interests of China, the United States and the world at large.”

In a follow-up statement, a ministry official said China would “take all necessary measures” to defend its rights and interests.

“We hope that the United States can realise the mutually beneficial essence of Sino-US economic and trade ties, and that it won’t do anything to impair the interests of others or itself,” the official said.

‘Unfair’ practices

In justifying the tariffs, Washington said a review of alleged Chinese intellectual property and technology transfer practices, launched by the Trump administration in August 2017, had found a range of “unfair”practices in China, including restrictions on foreign ownership that forced foreign companies to transfer technology.

The investigation, which came under Section 301 of the 1974 US Trade Act, also found evidence that China imposes unfair terms on US firms, steers investments in the US to strategic industries and is engaged in cyber attacks.

There will be a 30-day consultation period that only starts once a list of Chinese goods is published.

For its part, China announced plans to levy additional tariffs on up to $3 billion of US imports including fresh fruit, wine and nuts. This is in response to imports tariffs Mr Trump announced earlier this month on steel and aluminium.

China was the third largest market for US exports in 2016 and among the biggest buyers of American corn, pork and aircraft.

State media in China responded in similarly robust fashion.

The nationalist tabloid Global Times said the move was an “incredibly short-sighted solution” that was destined to fail.

“There is an old, but very applicable Chinese proverb that states that “the conceited troops are destined to lose.” This trade war is akin to the Trump administration playing with fire and it will end in disaster for the US,” it said in an editorial.

“Any trade war will only lead to a lose-lose situation. While both China and the US are economically resilient, one will invariably fail and that will result in political backlash. The Chinese people and American public will blame president Trump for the turmoil both countries will have experienced.”