China today responded to Trump’s protectionism with the announcement of possible tariffs worth 3,000 million dollars on imports of products from the US, a move that fuels the fear of a trade war that Beijing wants to avoid.
“China does not want a trade war, but we are not afraid of it at all, we have the confidence and capacity to face any challenge,” Chinese Foreign Ministry spokeswoman Hua Chunying stressed at a press conference in Beijing.
His appearance came a few hours after the Chinese Ministry of Commerce announced the possible imposition of tariffs on 128 US products, including tariffs of 25% on recycled aluminum products and pork, and 15% on wines, nuts, fruit or steel tubes.
“They have underestimated China’s ability to safeguard its legitimate rights and interests and this is the cost that the US has to pay for its reckless actions,” Hua told reporters.
These charges, which will be applied in two stages, are the responsibility of Beijing to the tariffs of 60,000 million dollars to the import of Chinese products that Donald Trump announced yesterday, with the aim of reducing the strong trade deficit that his country has with China and punish the alleged theft of patents.
“Despite appearances, Beijing’s response has been overwhelming,” he said, adding that tariffs on products worth 3,000 million dollars are not very strong if compared to Trump’s threat to apply tariffs of 60,000. He seems to be very clever, “Alex Fusté, chief economist at Andorran bank Andbank, told Efe.
According to his forecasts, although the Chinese Ministry of Commerce has not detailed the products to which tariffs could apply, it will be directed mainly to agricultural products, “with which it could inflict great damage on US producers.”
“The decisions are always used to send signals and the signals that Beijing would be sending with a tariff response for a value of only 3,000 million dollars are essentially three: we will respond, we have more capacity to hit and we do not want an escalation of the confrontation”, adds Fusté.
At the end of 2017, China’s trade surplus with the US was 1.87 trillion yuan (288,000 million dollars, 239,000 million euros), which represented an increase of 13% compared to the previous year in the first year of the President of Trump.
In addition to demanding that China balance the balance of trade between the two countries, the US president has resorted to Article 301 of the US Foreign Trade Act of 1974 to investigate the alleged theft by China of US intellectual property and the forced transfer of technology.
“Chinese innovation does not depend on theft,” but on the “hard work” of Chinese citizens, Hua defended himself.
The US response has sparked a widespread fear of a commercial battle and has caused major declines in international stock markets, which according to the Chinese Foreign Ministry demonstrates “the lack of confidence of the markets” in Trump’s policies and ” the concern of the international community. ”
Although he considers this reaction of the stock markets “exaggerated”, Professor Li Wei, director of the Center for Economy and Sustainable Development in China, told Efe that this may be due to the fact that Trump’s tariffs to China not only affect this Asian country.
“Imagine that tariffs are imposed in the US on the import of Xiaomi or Huawei phones, for example, its components are manufactured in Asian countries such as Japan, Korea or emerging countries, so the entire value chain will be affected and will suffer,” he pointed.
Therefore, he considers that the measure will be “unpopular” both in the US and in Asia.
Michael Kagan, manager of Clearbridge, a subsidiary of the US Legg Mason, warns that the US could go further and block Chinese investments in its territory, restrict its ability to do business and even limit the entry of Chinese citizens to US soil.
“Depending on the seriousness of this conclusion, there could be reprisals with a similar effect on the part of Beijing against US companies and imports,” he says, while warning that this response “could generate an earthquake in the markets.”
In his opinion, “a commercial war with the Asian country would hurt more American listed companies that would benefit”, such as the aeronautical, automotive, agricultural crops, semiconductors, and chemicals.