Reaction: Tough talk on global trade escalates as Donald Trump claims results

China has warned US of retaliation as it threatens tariffs on $3b worth of goods

BEIJING: The US and China’s top economic officials agreed by phone on Saturday to “continue to communicate” on trade issues, Chinese state media said, as President Donald Trump pledged his escalating trade showdown would get results despite push back from Europe and Beijing.

In his latest jolt to the prevailing global order, Trump on Thursday authorised tariffs on as much as $60 billion of Chinese imports, targeting sectors in which Washington says China has stolen American technology.

Liu He, the Chinese vice premier in charge of the economy, told US Treasury Secretary Steven Mnuchin on Saturday that Beijing was “ready to defend its national interests” but hoped that “both sides will remain rational and work together”, according to China’s official Xinhua news agency.

He also accused a US probe into Chinese intellectual property practices of violating international trade rules.

China had warned the United States on Friday that it was “not afraid of a trade war” as it threatened tariffs on $3 billion worth of US goods in retaliation. French President Emmanuel Macron also said Europe would respond “without weakness” to Washington’s threats of tariffs on steel and aluminium.

Global stocks have plummeted as fears rise that the confrontation could provoke a damaging trade war.

Meanwhile, World Trade Organization (WTO) Director-General Roberto Azevedo called for cooler heads to prevail, saying in a statement that new trade barriers would “jeopardise the global economy”.

But speaking to reporters on Friday as he signed new budget legislation, Trump said his efforts were beginning to bear fruit.

Washington this week said it would temporarily exempt Europe as well as countries including Brazil, Argentina, South Korea and Australia from the steep new steel and aluminium tariffs that Trump unveiled this month and which took effect on Friday.

European and US trade officials said this week they were beginning talks to reach a compromise.

“Many other countries are now negotiating fair trade deals with us,” Trump said.

Meanwhile, US Commerce Secretary Wilbur Ross said on Friday that US and South Korean officials were “relatively close” to reaching a deal on the steel and aluminium tariffs, with an announcement possible as early as next week.

On Saturday, the deputy director of China’s International Economic Exchange Centre and former vice minister of commerce Wei Jianguo told the China Daily newspaper that Beijing was already preparing two more such lists, potentially set to include other products like aircraft and microchips. Tourism and other sectors besides commodities might also be hit, he added.

The United States had a record $375.2 billion goods trade deficit with China last year.

Published in The Express Tribune, March 25^th, 2018.

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