China’s Trade Minister Zhong Shan warned that a trade war with the United States would bring disaster to the global economy, but said his nation won’t start one and that talks with the Trump admi-nistration continue.
“There is no winner in a trade war,” Zhong said at a news conference in Beijing last Sunday. “A trade war will only bring disaster to China, US and the global economy. China doesn’t want a trade war, and will not start a trade war. But we can handle any challenge, and will firmly defend the interests of our nation and our people.”
Zhong added that the US trade deficit with China is overestimated by about 20 percent, citing research by a panel tasked with investigating the discrepancy between the two nations’ accounts of their trade balance.
The deficit could be reduced by 35 percent if the United States eased export controls on high-technology products to China, he said, citing unspecified US research.
Trade tensions between the world’s two biggest economies intensified last week as President Donald J. Trump signed orders for stiff tariffs on steel and aluminum and indicated more actions are potentially on the way.
The US administration asked China for a plan to cut the annual US trade deficit with the nation by $100 billion, a White House official said last Friday.
As China’s exports surged in February its monthly surplus with the US widened from a year earlier to $20.96 billion, according to data from the customs bureau.
The US trade shortfall in goods with China surged 8.1 percent during the first year of Trump’s presidency, reaching a record $375 billion, according to Commerce Department data released last month.
The main channel of dialogue on trade between the two nations, the Comprehensive Economic Dialogue, has been put on hold over US frustration over a lack of progress. But Zhong said communications have not been completely broken off.
“We are still in talks, and we are sure that both sides will keep talking for the next step,” he said.
Trump ‘clarity’ on tariff not what EU was looking for Hours after European Union (EU) trade chief Cecilia Malmstrom said she had “no immediate clarity” on whether the bloc will be let off the hook from planned US tariffs, Trump laid down his conditions and repeated a threat if they’re not met.
“The European Union, wonderful countries who treat the US very badly on trade, are complaining about the tariffs on Steel & Aluminum,” he wrote on Twitter. “If they drop their horrific barriers & tariffs on US products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!”
Trump’s response came after Malmstrom on Twitter described what she called “frank” but fruitless talks with US Trade Representative Robert Lighthizer in Brussels last Saturday.
There was still “no immediate clarity on the exact US procedure on exemption,” Malmstrom, the 28-nation bloc’s trade commissioner, said after the meeting that also included Japanese Trade Minister Hiroshige Seko. “As a close security and trade partner of the US, the EU must be excluded from the announced measures,” she said.
Canada, Mexico and Australia have secured exemptions from the tariffs of 25 percent on imported steel and 10 percent on aluminum announced by Trump, though Canada’s and Mexico’s were conditioned on progress renegotiating the North American Free Trade Agreement.
Australian Prime Minister Malcolm Turnbull heralded his nation’s exemption last Saturday morning following a phone call with Trump, which he described as “a very good and productive discussion.”
Trump has called the tariffs a matter of national security while threatening to tax European car imports and impose “reciprocal taxes” on countries that charge higher duties on US goods than the United States now charges on their products.
Malmstrom, Lighthizer and Reko are set to meet on the margins of the Organisation for Economic Co-operation and Development ministerial meeting in Paris next week to further discuss the issue, according to a joint statement after the talks.
Image credits: AP/Ng Han Guan