Speaking at a weekly news conference, Commerce Ministry spokesman Gao Feng warned the proposed US tariffs would hit global supply chains, including foreign companies in the world’s second-largest economy. The Trump administration has also weighed restrictions on Chinese companies and start-ups in sectors ranging from aerospace to robotics.
“Put simply, the U.S. is opening fire on the world – and itself”, Chinese Ministry of Commerce spokesperson Gao Feng said on Thursday.
The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks. Chinese companies and investors girded for the worst, while economists cautioned any impact on the economy would be minimal.
But the integrated character of hi-tech development, in which components cross borders during the manufacture of the final product, means that U.S. companies will be hit by the trade war measures. Xi enjoys something closer to life-time job security, thanks to the repeal of Chinese presidential term limits in February.
German business daily Handelsblatt reports (link in German) that Grenell met Daimler CEO Dieter Zetsche, BMW CEO Harald Krüger, and VW CEO Herbert Diess on Wednesday evening to discuss both sides abolishing all tariffs on each others vehicle imports.
“The United States will be opening fire on the whole world and also opening fire on itself”, said China’s Commerce Ministry spokesperson on Thursday, reiterating that Beijing will fight back.
China is expected to retaliate as soon as the U.S. tariffs go into effect, imposing duties on goods worth roughly the same amount but with a greater emphasis on politically sensitive farm agricultural products.
Last Friday, AmCham China, which represents about 900 companies here, called a private meeting at a Beijing hotel to discuss the effects of the ongoing negotiations.
Chinese stocks actually rose after the announcement with the benchmark Shanghai Composite Index up almost one percent and the broader Shenzhen index climbing more than one percent. Chinese manufacturers have already been hit by a strengthening yuan that has made exports more expensive.
A second tranche of 284 goods worth $16 billion is now under review and could be added to the United States list.
With further tit-for-tat levies already threatened between the US and China, some investors are concerned this week may mark the start of a trade war that spreads globally. But that step drives up costs for U.S. companies that rely on Chinese-made machinery or components and may force them to pass them along to their business customers, and eventually to consumers. Then, companies won’t be able to figure out how to get the materials they need.
Some economists warn that an all-out trade war would put the brakes on the US economy by eroding business confidence, interrupting supply chains and increasing costs of imports to USA companies and consumers.
Another US$16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach US$550 billion, a figure that exceeds all of USA goods imports from China in 2017. “So we have 50 plus 200 plus nearly 300”.
The first round of tariffs for American and Chinese goods goes into effect on Friday, officially plunging the two countries into a trade war that could end up undermining the USA economy.
Ironically, Cohen says the victims of Chinese IP or intellectual property theft won’t benefit from the tariffs.
China’s economy is no longer as dependent on exports. His assessment of things is not much different from what you can find in many geopolitical analysis papers from large parts of the country’s think tanks.
The White House mindset that “surgery always requires killing the patient first” left the United States with fewer partners to “protect democracy’s essential freedoms against the likes of Russian Federation and China”.
Tariffs imposed so far by all sides affect about $60 billion of goods, or 0.3 per cent of world trade, according to Slater.
In areas as basic as new seeds and agricultural biotech, business groups complain Beijing blocks access to USA and other imports while it tries to build up alternative suppliers. “The impact on the U.S. political environment is, however, likely to be far greater”, he said.
Beijing has vowed to immediately respond with an equal amount of tariffs of its own against USA autos, agricultural and other products, but it was unclear how swiftly the actions could escalate into an all-out trade war.
“U.S. measures are essentially attacking global supply and value chains”.
“But the tariffs will bring double-lose results”.
ZTE’s chairman said the April ban over its exports to Iran and North Korea could destroy China’s No. 2 maker of network gear.