Posts Tagged ‘World Trade Organisation’

Australia vulnerable to ‘full-blown trade war’ as US-China tension deepens

June 17, 2018

Australia is overexposed to a full-blown trade war between the US and China, business leaders have warned, as the Trump administration increases sanctions on Chinese products.

The Turnbull government moved quickly to put itself at the front of negotiations on Saturday after it was revealed a 25 per cent tariff on $US50 billion ($67 billion) worth of 1102 Chinese imports would take effect from July 6.

Foreign Minster Julie Bishop urged the world’s two largest economies to take their dispute to the World Trade Organisation before it hit global standards of living and economic growth.

Image result for julie Bishop, photos

Foreign Minster Julie Bishop

By Eryk Bagshaw

“Free and open trade and investment is of great benefit to our country and the world,” she said. “It’s a position that we have made very clear to our American friends and we’ll continue to promote it.”

Prime Minister Malcolm Turnbull said he would not stop lobbying for free trade despite the fifth hit to the dominant world economic order in as many months.

“My job as your prime minister is to ensure more Australians have well-paid jobs,” he said. “That’s why we’re supporting free trade; we don’t give up on it.”

Labor trade spokesman Jason Clare said the signs were ominous.

“This is not good – no one wins from a trade war,” he said. “The US and China make up almost half the world’s gross domestic product. If this escalated into a full-blown trade war, everyone will suffer – including us.”

The Chinese Commerce Ministry struck back at the US immediately on Saturday, stating it would “fight back strongly” against “the short-sightedness of the US”, by imposing an additional 25 per cent tariff on 659 US goods worth $US50 billion.

Industrial machinery, communications technology, orange juice, whiskey, beef, poultry and soybeans are among the products in the middle of the trade battle, which comes just weeks after the US slapped tariffs on steel and aluminum imports from Canada, Mexico and the European Union.

The crackdown is the next step in US President Donald Trump’s election pledge to protect US manufacturing jobs. He has also accused China of undermining Silicon Valley-produced technology and intellectual property.

The development hit markets on Friday in the US, with the Dow Jones falling 220 points by mid-afternoon trading. Wall Street is growing increasingly concerned that the looming trade war could stifle economic growth despite the benefits of Trump company tax cuts.

The Australian Chamber of Commerce and Industry warned Australia was exposed through its significant interest in many of the economies involved.

“Bilateral tit-for-tat trade sanctions can end up distorting global supply and demand, restricting trade,” the chamber’s chief executive, James Pearson, said.

“Ultimately it could lead to the thing that we all fear: a full-blown trade war from which no one wins.”

He urged the Turnbull government to continue to use its influence as a respected free-ttrade advocate  to ease tensions.

“Australia as a trading nation is more exposed than most to the risk of bilateral trade sanctions escalating further and has a strong interest in doing what we can to reverse this trend,” he said.

Mr Pearson said that while there could be some short-term gains for Australian producers gaining increased access to markets in China or the US, such as beef exporters, it was not worth the long-term pain.

James Pearson, chief executive of the Australian Chamber of Commerce and Industry

Photo: Andrew Meares

“It’s an ill wind that blows no one any good,” he said. “The manner in which tit-for-tat trade sanctions are starting to spread presents a real risk which is more significant than the temporary opportunities that might be presented to individual firms or industry.”

Consumers might see short-term benefits from an increased supply and cheaper imports leaving the US or China and heading to Australian shores, Mr Pearson said, but Australian goods made in China might struggle to find a home without open access to the US.

Local exporters are already facing problems getting their products into China, with six Australian wine companies being hit by bureaucratic delays at customs, linked to the Turnbull government’s concerns over Chinese political interference.

Trade Minister Steve Ciobo said the Australian government would look to new markets to shore up trade prospects beyond the US.

“A full one-third of Australia’s GDP growth has come from extra exports because we have opened up markets like Singapore, China, Japan, Korea, Hong Kong, the European Union and the UK,” he said.

“All of this is dedicated to boosting opportunities for Australian businesses.”

With AP


China’s Xi calls out ‘selfish, short-sighted’ trade policies — Trump suggests no tariffs, no subsidies, complete “free trade” without unfair trade practices

June 10, 2018

Chinese President Xi Jinping, whose country is locked in a high-stakes trade dispute with the United States, on Sunday said China rejects “selfish, shortsighted” trade policies, and called for building an open global economy.

Xi did not mention the United States during a speech at a summit meeting of the Shanghai Cooperation Organisation (SCO), a regional security bloc led by China and Russia.

“We reject selfish, shortsighted, closed, narrow policies, (we) uphold World Trade Organisation rules, support a multi-lateral trade system, and building an open world economy,” Xi said in a speech in the port city of Qingdao.

Image may contain: 2 people, people smiling, people standing
A TV screen shows a live broadcast of Chinese President Xi Jinping attending a group photo of Shanghai Cooperation Organization (SCO) summit at the media center, in Qingdao, Shandong Province, China June 10, 2018. REUTERS/Aly Song

The United States and China have threatened tit-for-tat tariffs on goods worth up to $150 billion each, as President Donald Trump has pushed Beijing to open its economy further and address the United States’ large trade deficit with China.

Xi spoke hours after Trump said he was backing out of the Group of Seven communique, thwarting what appeared to be a fragile consensus on a trade dispute between Washington and its top allies.

“We must … discard Cold War thinking, group confrontation; we object to acts of getting one’s own absolute security at the cost of other countries’ security,” Xi said.

The SCO was launched in 2001 to combat radical Islam and other security concerns in China, Russia and across Central Asia.

It added two new members, India and Pakistan, last year and Iran has been knocking at the door. Tehran is currently an observer rather than a full member of a bloc that also includes four ex-Soviet Central Asian republics.

Xi also said China would offer the equivalent of 30 billion yuan ($4.7 billion) in loans under a framework formed by SCO countries.

Donald Trump is picking up pennies as China steamrollers global trade

June 4, 2018

Sometimes, faced with a big, intractable problem, we humans spend all our energy on avoiding it. A report deadline, an ailing relationship or an existential challenge to capitalism and global trade – such challenges, approaching like steamrollers from afar, all seem to push us to remarkable new heights of creative procrastination.

The steamroller, in this case, is China. And the governments and institutions picking up pennies before it are the US, Britain and, to a lesser extent, the EU. Donald Trump has just started a major trade dispute with the US’s closest allies. Britain is embroiled in arcane arguments about customs procedures. And the EU, though it is genuinely trying to have a strategic trade policy, is preoccupied with the ongoing failings of its single currency and migration system, while blowing up its security alliance with the UK for good measure. All the while, China’s dominance of world trade grows.

Donald Trump and Xi Jinping

At the moment when the capitalist world should be banding together to take on China, Trump is picking on his allies CREDIT: ANDY WONG/ AP

Commentary By

The underlying problem is that the West was wrong about China. Or at least, if we were right, it’s not evident yet. Drawing on our Cold War victory, the view was that China’s democratisation or collapse was only a matter of time. Once a substantial middle class emerged, the theory went, they would demand political rights. Instead, China’s enrichment and enormous technological advances have only tightened the grip of the Communist Party. A new model – a type of authoritarian, mercantilist capitalism – has emerged and it is now the biggest threat faced by the Western conception of freedom.

The main reason it threatens us is that it seems to work. By “work”, I don’t mean that it’s a good thing. I mean that it achieves two aims: propelling China to the forefront in trade and technology, thereby keeping the Communist Party in power. Its toolkit includes many positives, like massive investment in education and science and segments of great economic freedom and entrepreneurialism. But it also deploys socialist or mercantilist mainstays: technology theft, enormous subsidies, state ownership of industry and quiet, ongoing bailouts. And it relies on another truly dark set of tools: propaganda, censorship, imprisonment, execution, torture, forced relocation, mass surveillance and social engineering on an astounding scale.

This innovative blend has helped China become the world’s biggest exporter, its biggest filer of patents and the world’s second biggest economy. Their companies can buy ours and sell many goods and services here, but we don’t get the same access there. Our businesses have to compete with many Chinese firms benefiting from a protected home market, copycat technology, state political and financial support and much less stringent limits on data usage or genetic engineering. With automation and globalisation having already wiped out a swathe of industrial jobs, the West now faces the prospect of losing its technological edge to a quasi-communist state.

For Britain, there are two potential strategies available. The first is to shrug and reiterate that staying open to trade is always the right policy. Advocates of this approach, like George Osborne, tend to argue that China’s record is improving on issues like the rule of law or the protection of foreign companies’ intellectual property. In this view of the world, China’s economic model is legitimate, its subsidies and protections will ultimately only hurt its own economy and its rise is both inevitable and a great opportunity. Therefore, this argument goes, we should throw open the door, confident that the best strategy is to cultivate trade with China, letting its companies sell us goods and services or buy up their British rivals, so that, in due course, we gain the best possible access to its market and technologies.

There is much that appeals in this argument. It fits with economic theory, which says that even unilateral free trade benefits a country. It professes faith in Britain’s ability to compete. Until recently, I thought it was the right approach. Then I considered the other possibility.

The alternative strategy available to Britain and its allies is to try and bring about a significant rebalancing in global terms of trade. The aim would be to persuade China that it must carry out reforms to reduce subsidies, respect foreign intellectual property, obey World Trade Organisation rules and open up its market. If it doesn’t, Western voters simply won’t tolerate globalisation and free trade, because our companies won’t be able to compete fairly.

This approach is worth trying. It requires both a carrot and a stick. The carrot would take the form of offering China potential trade deals in future and a greater say in international institutions, like the WTO, conditional on Beijing sticking to the rules. The stick would take the form of reduced market access and targeted tariffs.

Unfortunately, it will only work if it’s embraced by most of the liberal, capitalist world. It requires an alliance stretching from the US to New Zealand, from Germany to Japan, to be taken seriously. This alliance would encompasses many different economic models, but they are all broadly capitalist and all share an interest in pushing China to reform. Had Mr Trump travelled to Brussels or Tokyo with this aim in mind, he would have found partners ready to listen. Instead we have a US president picking fights with everyone at once, including his country’s closest allies. He clearly understands the concept of carrot and stick. He has credibility in using the stick. But he seems to think the US can act entirely alone, browbeating everyone into submission, instead of focusing its energies on the most important geopolitical struggle.

Britain, meanwhile, is obsessing over the minutiae of Brexit even as we need clear thinking. Brexit was meant to create a new sense of our role in the world. Whether it’s on China, trade wars, or Brexit, the government desperately needs to pick a strategy and unite behind it. It could choose to part ways with the EU and US, remaining open to China. Or it could choose to help build an alliance to put pressure on China. As an open, commercially-minded nation, Britain should be well-positioned to do either – brokering agreements, pulling strings and bridging the gap between east and west. Instead, it’s drifting. And so the moment to act is passing us by.

US showing China ‘yellow card’ on trade — China breached its commitments to the World Trade Organisation

April 24, 2018

The United States has issued China with a “yellow card” on trade, said its consul general in Hong Kong Tuesday, in a strongly worded speech

The China problem is too big to ignore

© AFP | Kurt Tong, US Consul General to Hong Kong, speaks during a lunch at the Foreign Correspondents Club

US President Donald Trump last month approved plans for steep tariffs on tens of billions of dollars of Chinese imports, while Beijing has slapped duties on key US agricultural exports and threatened to do likewise for the sensitive American soybean industry.

The dispute has triggered fear of an all-out trade war that could damage the global economy.

Consul General Kurt Tong said China had breached its commitments to the World Trade Organisation to such an extent that it was detrimental to the US, which was now “justified in claiming damages”.

“To borrow a metaphor from my favourite sport, China has drawn a deserved yellow card,” said Tong, who is a keen footballer.

“Yellow cards are an opportunity for a player to change their style of play before someone gets hurt,” he told the Foreign Correspondents’ Club.

Tong said there were “worrisome signs” that China was backsliding on economic reform as the central government tightens control.

Unfavourable terms for inward foreign investment, high tariffs and lack of protection for intellectual property rights were among the problems, he said.

“Some analysts have said that, given its size and importance, China is now too big to be challenged. I would submit that the opposite is true. I think that the China problem is too big to ignore,” he added.

Semi-autonomous Hong Kong should stand as an example of how an economy can be part of China but also play by the rules, said Tong.

Since being handed back to China by Britain in 1997 the city has been governed under a “one country, two systems” deal which grants it rights unseen on the mainland.

But in recent years Beijing has tightened its grip on the city. There is growing concern that the autonomy of the financials hub, protected by the rule of law and an independent judiciary, is now in jeopardy.

Tong called on the local government and the city’s private sector to make use of what he called Hong Kong’s “abiding strengths”.

“Hong Kong has an opportunity to proactively use its autonomy to further strengthen its impressive economic competitiveness, as well as its inherent value proposition in the eyes of foreign partners,” he said.


China Retaliates Against Trump Tariffs With Duties on American Meat and Fruit — “Beijing’s response is designed to be limited and doesn’t seek to escalate tensions.”

April 2, 2018

Penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities

President Donald Trump speaking about the new steel and aluminum tariffs during a meeting with industry leaders last month. China has now responded.
President Donald Trump speaking about the new steel and aluminum tariffs during a meeting with industry leaders last month. China has now responded. PHOTO: MANDEL NGAN/AGENCE FRANCE-PRESSE/GETTY IMAGES

BEIJING—China imposed tariffs on a range of U.S. goods, following through on a promise to retaliate against the Trump administration’s penalties on imports of Chinese steel and aluminum.

The Chinese Finance Ministry said in a statement dated Sunday that the previously announced tariffs on the imports of American goods would take effect Monday.

Penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the ministry said.

The Finance Ministry renewed China’s criticisms of the Trump administration’s 25% tariffs on steel and 10% tariffs on aluminum under Section 232 of the Trade Act as violating global trading rules.

At the same time, the ministry suggested that Beijing’s response is designed to be limited and doesn’t seek to escalate tensions.

The tariffs on Chinese steel and aluminum “produced severe damage to our country’s interests,” the ministry statement said.

It said the Chinese penalties were being imposed “to protect our country’s interests and balance the damage created by the U.S. 232 measures.”

The Trump administration didn’t immediately comment on the Chinese action.

The back-and-forth over the U.S. steel and aluminum tariffs are part of a broader effort by the Trump administration to punish Beijing for what it sees as unfair trade practices and rally broader international support for it.

President Donald Trump has also ordered a series of actions to penalize Beijing under Section 301 of the Trade Act for the use of intimidation and other unfair practices to acquire American technology. Those actions include tariffs on as much as $60 billion in Chinese imports and filing a complaint with the World Trade Organization against Chinese technological licensing practices as well as considering other limits on Chinese investment in U.S. technology.

Chinese penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the Chinese Finance Ministry said.
Chinese penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the Chinese Finance Ministry said. PHOTO: GERRY BROOME/ASSOCIATED PRESS/FILE

U.S. and Chinese officials are engaged with one another to try to resolve the disputes, or at least prevent tensions from escalating. U.S. Treasury Secretary Steven Mnuchin is considering a trip to Beijing in the next several weeks to continue conversations with China’s economic czar, Liu He, on potential U.S. investment restrictions.

Beijing has promised retaliatory measures in response to specific actions by the Trump administration. Soybeans and other products from American farm states are high on the list of potential targets, as well as other big-ticket U.S. goods like Boeing Co. aircraft.

“It’s nothing we like to see,” said David Salmonsen, senior director of the American Farm Bureau Federation, of potential tariffs. “We know it will have some impact.”

On steel and aluminum, the U.S. has granted temporary exceptions to most every exporter to the U.S. other than China and Japan—and Tokyo is negotiating for exceptions.

To keep their access to the U.S. market, the Trump administration hopes those nations will limit their own imports of Chinese-made steel and aluminum, which is often further processed and then exported to the U.S. In doing so, the Trump administration hopes to bring broad-based pressure against Beijing to rein in excess production.

This week, the Trump administration is expected to release a list of potentially targeted products for China’s alleged intellectual-property violations. Senior administration officials have said they are looking at 1,300 different product categories, including such high-tech areas as semiconductors, communications and aerospace.

U.S. industry will have 30 days to comment. After that, the U.S. has at least 180 days to decide which products—if any—to hit with tariffs.

Write to Charles Hutzler at

Appeared in the April 2, 2018, print edition as ‘China Retaliates With Own Tariffs.’


China’s Ministry of Commerce: tariffs of up to 25 per cent on 128 US products including frozen pork

April 2, 2018

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BEIJING (REUTERS, AFP) – China has slapped extra tariffs of up to 25 per cent on 128 US products including frozen pork, as well as on wine and certain fruits and nuts, in response to US duties on imports of aluminium and steel, China’s finance ministry said.

The tariffs, to take effect on Monday (April 2), was released late on Sunday and matches a list of potential tariffs on up to US$3 billion (S$4 billion) in US goods published by China on March 23 .

China’s Ministry of Commerce (MOFCOM) said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 US goods, including fruit. The tariff on the products will be raised to 15 per cent.

Another eight products, including pork, will now be subject to tariffs of 25 per cent, it said, with the measures effective from April 2.

China has imposed the tariffs amid escalating trade tensions between Beijing and Washington.

US President Donald Trump is preparing to impose tariffs of more than US$50 billion on Chinese goods intended to punish Beijing over US accusations that China systematically misappropriated American intellectual property – allegations Beijing denies.

China has repeatedly promised to open its economy further, but many foreign companies continue to complain of unfair treatment. China warned the United States on Thursday not to open a Pandora’s Box and spark a flurry of protectionist practices across the globe.

In a statement published on Monday morning, MOFCOM said the United States had “seriously violated” the principles of non-discrimination enshrined in World Trade Organization rules, and had also damaged China’s interests.

“China’s suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organisation,” it said, adding that differences between the world’s two largest economies should be resolved through dialogue and negotiation.

“We hope that the United States can withdraw measures that violate WTO rules as soon as possible to put trade in the relevant products between China and the US back on a normal track,” the Commerce Ministry statement said.

“Cooperation between China and the United States, the world’s two largest economies, is the only correct choice.”

Mr Trump has temporarily suspended the tariffs for the European Union as well as Argentina, Australia, Brazil, Canada, Mexico and South Korea.

Beijing has so far held fire against major US imports such as soybeans or Boeing aircraft – items that state-run daily the Global Times suggested should be targeted.

The nationalistic newspaper said in an editorial last week that China has “nearly completed its list of retaliatory tariffs on US products and will release it soon”.

“The list will involve major Chinese imports from the US,” the newspaper wrote, without saying which items were included.

“This will deal a heavy blow to Washington that aggressively wields the stick of trade war and will make the US pay a price for its radical trade policy toward China,” the Global Times wrote.

Despite the rhetoric, US Commerce Secretary Wilbur Ross on Thursday suggested the new measures on intellectual property were a “prelude to a set of negotiations”.

The United States ran a US$375.2 billion deficit with China last year.

China pledges to open markets — Beijing scrambles to avert a trade war

March 27, 2018

Image may contain: 1 person, eyeglasses, suit and closeup


Premier makes promise even as Beijing calls on WTO members to unite against US moves

BEIJING • Chinese Premier Li Keqiang said China and the US should maintain negotiations and he reiterated pledges to ease access for American businesses, as Beijing scrambles to avert a trade war.

Mr Li made the comments yesterday even as China called on World Trade Organisation (WTO) members to unite to prevent the US from “wrecking” the WTO.

He told a conference that included global chief executives that China would treat foreign and domestic firms equally, would not force foreign firms to transfer technology and would strengthen intellectual property rights, repeating promises that have failed to placate Washington.

“With regard to trade imbalances, China and the United States should adopt a pragmatic and rational attitude, promote balancing through expansion of trade, and stick to negotiations to resolve differences and friction,” Mr Li said at the the China Development Forum, according to state radio.

The US asked China in a letter last week to cut a tariff on US cars, buy more US-made semiconductors and give US firms greater access to the Chinese financial sector, The Wall Street Journal reported yesterday, citing unidentified sources.

Alarm over a possible trade war between the world’s two largest economies has chilled financial markets as investors fear dire consequences should trade barriers go up due to US President Donald Trump’s bid to cut the US$375 billion (S$491 billion) trade deficit with China.

US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer listed steps they want China to take in a letter to newly appointed Vice-Premier Liu He, who oversees China’s economy, the Journal said, quoting sources with knowledge of the matter.

Despite a steady stream of fierce rhetoric from Chinese state media lambasting the US for being a “bully” and warning of retaliation, Chinese and US officials are busy negotiating behind the scenes.

China has offered to buy more US semiconductors by diverting some purchases from South Korea and Taiwan, the Financial Times reported, citing people briefed on the talks.

Chinese officials are also working to finalise rules by May – instead of the end of June – to allow foreign financial groups to take majority stakes in Chinese securities firms, the Financial Times said.

“I anticipate that for political reasons it would be logical for China to respond,” Blackstone Group chief executive Stephen Schwarzman told Reuters yesterday on the sidelines of the China Development Forum.

“That is why I view this more as a skirmish, and I think the interests of both countries are served by resolving some of these matters.”

Fears of a trade war mounted this month after Mr Trump imposed tariffs on steel and aluminium imports, and then last Thursday specifically targeted China by announcing plans for tariffs on up to US$60 billion of Chinese goods.

A US inquiry had found China guilty of intellectual property theft and unfair trade, by forcing US investors to turn over key technologies to Chinese firms. Last Friday, China responded to the US tariffs on steel and aluminium by declaring plans to levy additional duties on up to US$3 billion of US imports.

Yesterday, Beijing’s envoy Zhang Xiangchen told delegates at the Geneva-based WTO that Mr Trump’s plan to impose tariffs on Chinese goods under Section 301 of the 1974 US Trade Act broke WTO rules. “The US is setting a very bad precedent by bluntly breaching its commitment made to the world. WTO members should jointly prevent the resurrection of 301 investigations and lock this beast back into the cage of the WTO rules,” he said.

“Unilateralism is fundamentally incompatible with the WTO… The WTO is under siege, and all of us should lock arms to defend it.”



UK’s Farage says EU’s Barnier doesn’t get Brexit — Britain has already given enough in negotiations

January 8, 2018


© AFP | Ex-UKIP leader Nigel Farage said the EU’s Michel Barnier ‘clearly did not understand why Brexit happened’ after a meeting
BRUSSELS (AFP) – Leading Brexit campaigner Nigel Farage accused EU negotiator Michel Barnier of failing to understand why Britain voted to leave the union after the two men held their first official meeting on Monday.Farage also urged the former French minister to compromise, including on financial services in any future EU-UK trade deal, saying Britain had already given enough in negotiations.

“Mr Barnier clearly did not understand why Brexit happened,” Farage, the former head of the UK Independence Party and still a member of the European Parliament, wrote on Twitter.

Britain voted to leave the European Union by a narrow 52 to 48 percent margin in June 2016 after a campaign in which Farage played a key role.

Farage later said in a video message: “He doesn’t understand for one moment that immigration was a big reason that we voted for Brexit. (It was) perfectly clear to me the British government hasn’t even discussed the subject with him so far.

“We’ve given an awful lot already, and in terms of him giving a bit back, to make sure there’s a deal on services and financial services, well, I wouldn’t say it’s a happy new year for the Brexit deal.”

He added that the chances of Britain leaving in March next year without an agreement on future relations with the EU — which would leave businesses subject to punishing World Trade Organisation tariffs — “will increase” without a compromise from Barnier.

Britain and the EU reached agreement in December on the terms of its exit from the bloc, including a multi-billion divorce bill.

They are expected to start talks in February on a transition phase after Britain leaves — the EU says it should last until the end of 2020 — during which most EU rules will still apply.

Negotiations on future trade and security relations are due to start in April, but the EU says it is impossible to agree on an actual trade deal until after Britain has formally left.

Barnier has travelled across Europe in recent months meeting governments to hear their wishes for the Brexit negotiations, but has also met several figures who are not directly involved in the talks, including British opposition Labour leader Jeremy Corbyn.

China hits back at Donald Trump’s ‘zero-sum mentality’ on trade, threatens retaliation

January 3, 2018

US politicians, with a ‘deep-rooted mistrust’, have failed to catch up with China’s understanding of cooperation, Xinhua commentary says

PUBLISHED : Wednesday, 03 January, 2018, 10:02pm
UPDATED : Wednesday, 03 January, 2018, 11:26pm
South China Morning Post

Beijing on Wednesday criticised Washington’s “zero-sum mentality” with regards to bilateral trade and threatened to retaliate against the tougher stance taken by US President Donald Trump in recent weeks.

“China and the United States are about to ride a bumpy journey in trade in 2018 if the US government goes it own way, and retaliatory measures by China could be on the table,” Xinhua said in an English-language commentary.

The article did not say what measures the government might take.

It said, however, that Trump’s decisions to launch an investigation into alleged Chinese intellectual property theft, reject China’s market economy status at the World Trade Organisation, and label China as a strategic “competitor” had eroded goodwill between the world’s two largest economies.

 The “bonhomie” seen as US$250 billion worth of trade deals were struck between China and the US during Donald Trump’s visit to Beijing in November was fading away, Xinhua said. Photo: AFP

The “bonhomie” seen as US$250 billion worth of trade deals were struck during Trump’s visit to China in November was fading away because Washington was “stuck in a zero-sum mentality”, the report said.

“China has not hesitated to make it clear that it is not seeking global dominance, rejecting a zero-sum mentality between countries, especially between the United States and China … China’s case is not well received by the United States,” it said.

“With deep-rooted strategic mistrust towards China, US politicians have failed to catch up with China’s understanding of cooperation and adopted an increasingly protective and isolationist approach.”

The threat of a trade war between China and the US has been simmering since Trump was elected to the White House in November 2016. Since then he has accused China of stealing American jobs and threatened to impose punitive tariffs on Chinese products of up to 45 per cent.

China’s tactic of promising to buy more US products helped to avert a trade war last year, but the imbalance between the two countries continued to widen.

Even by Beijing’s figures, China’s trade surplus with the US in the first 11 months of 2017 was bigger than that for the whole of the previous year.

 China’s trade surplus with the US in the first 11 months of 2017 was bigger than that for the whole of 2016. Photo: AP

Tensions between the two countries have certainly been rising. In late November, the US Department of Commerce said it was initiating countervailing duty and anti-dumping investigations into Chinese aluminium alloy sheet imports despite not having received an industry complaint.

On Tuesday, the US Commission for Foreign Investment vetoed Chinese firm Ant Financial’s takeover bid for US-based money transfer company MoneyGram International over national security concerns.

Despite suggesting that the US felt “uneasy” in the face of a rising China, the Xinhua commentary sought to find a positive note.

“Are there reasons for optimism in 2018? An injection of hope is urgently needed for the world’s top two economies to sail the charted course,” it said.

“The price is too high for the two peoples to pay if scepticism grows and tension escalates,” it said, adding that for both countries, cooperation was “the only correct choice”.