Beijing has warned that new tariffs mooted by the Trump administration will have a deeply adverse impact upon the global economic order.
Wang Hejun, head of the trade remedy and investigation bureau of China’s Ministry of Commerce, said on Friday that the proposed tariffs of 10% on aluminium and 25% on steel would “seriously damage multilateral trade mechanisms represented by the World Trade Organisation and will surely have a huge impact on the normal international trade order.”
According to Wang Beijing will seek to cooperate with other countries in order to stymie the adverse impacts of the tariffs should they be implemented.
“If the final measures of the United States hurt Chinese interests, China will work with other affected countries in taking measures to safeguard its own rights and interests,” said Wang in an official statement.
Trump’s proposed new tariffs have triggered intense criticism amongst US trading partners as well as rattled regional stock markets, with the Hang Seng Index dropping 1.48% and the Shanghai Composite Index edging lower 0.59% on Friday.
While concerns about a battle of retaliatory tariffs were not assuaged by Trump’s tweet on Friday that “trade wars are good and easy to win,” analysts point out that the steel and aluminium levies currently on the table are unlikely to have much serious effect upon China.
Last year China supplied only 3% of the USA’s 35.6 million tonnes of steel imports. Canada accounted for the biggest share at 16%, followed by Brazil and South Korea.
Beijing is nonetheless concerned enough about a potential trade war to dispatch two members of the politburo to the US as representatives within the space of a month.
Rising political star Liu He is visiting the US as part of efforts by Beijing to ease trade tensions, meeting with US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and National Economic Council director Gary Cohn.
A week previously State Councillor Yang Jiechi also visited the US, yet did not appear to gain much ground during trade negotiations.
Chinese economic analysts are optimistic about the prospects for China and the US to avert a full blown trade war, pointing out that Beijing has signalled it’s willingness to compromise by sending two members of the Politburo as envoys in such rapid succession.
“I think Liu He will be able to de-escalate the trade tensions at least for now because he is tasked with avoiding further sanctions on China from the US side and bringing bilateral ties back from the brink of confrontation over trade, which is apparently the priority for the top leaders in Beijing,” said Shen Dingli, dean of Fudan University’s Institute of International Studies, to the South China Morning Post.