China ‘fully prepared’ to defend interests in trade war with US

Shares drop broadly as investors shunned risky assets while waiting to see if trade war can be avoided

Donald Trump threw global financial markets into turmoil with his surprise threat on Sunday to raise import duties on $200 billion of Chinese goods from 10% to 25%. Photograph: Justin Lane/EPA

Donald Trump threw global financial markets into turmoil with his surprise threat on Sunday to raise import duties on $200 billion of Chinese goods from 10% to 25%. Photograph: Justin Lane/EPA

 

China is fully prepared to defend its interests in its trade war with the United States, but hopes the US can resolve problems through dialogue instead of unilateral steps, the Chinese commerce ministry said on Thursday.

China has the determination and capacity to defend its interests, but hopes the US can meet it halfway, Gao Feng, the ministry’s spokesman, told reporters.

Vice premier Liu He is heading a delegation set to hold talks with US counterparts in Washington on Thursday and Friday aimed at salvaging a deal, after US president Donald Trump threatened to hike tariffs on Chinese goods on Friday.

China opposes unilaterally imposed tariffs, and will not succumb to any pressure, Mr Gao said.

Mr Trump threw global financial markets into turmoil with his surprise threat on Sunday to raise import duties on $200 billion (€178.6 bn) of Chinese goods from 10 per cent to 25 per cent.

He complained talks were moving too slowly and Beijing was trying to backtrack on earlier agreements.

European shares dropped broadly on Thursday as investors shunned risky assets while waiting to see whether the countries can manage to avoid a trade war which would damage the global economy.

The pan-European STOXX 600 index had dropped 0.7 per cent by 8.20am Irish time, touching a fresh four-week low.

Mr Trump said on Wednesday that China “broke the deal” it had reached in trade talks with the United States, and vowed not to back down on imposing new tariffs on Chinese imports.

“China deeply regrets that if the US tariff measures are carried out, China will have to take necessary countermeasures,” said a commerce ministry statement.

Mr Trump has raised import duties on $250 billion of Chinese goods starting last July over complaints Beijing steals or pressures companies to hand over technology.

These include chemicals, building materials, furniture and some consumer electronics.

The US tariff action would come in the middle of meetings between Mr Liu and Mr Trump’s top trade officials in Washington. Expectations were recently riding high for a deal to be reached, but a deep rift opened up last weekend over the language of the proposed pact.

Reaching a deal requires effort from both sides, Mr Gao said, adding that China had demonstrated its sincerity in the ultimate form by sending its trade delegation to the US despite Washington’s tariff threats.

The world’s two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over US demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China’s market more accessible to US companies.

Mr Trump also threatened on Sunday to levy tariffs on an additional $325 billion of China’s goods, on top of the $250 billion of its products already hit by import taxes. –Reuters and PA