Tough talk on global trade escalates as Trump claims results

The US and China's top economic officials agreed by phone today to "continue to communicate" on trade issues, Chinese state media said, as President Donald Trump pledged his escalating trade showdown would get results despite pushback from Europe and Beijing.

In his latest jolt to the prevailing global order, Trump on Thursday authorised tariffs on as much as USD 60 billion of Chinese imports, targeting sectors in which Washington says China has stolen American technology.

Liu He, the Chinese vice premier in charge of the economy, told US Treasury Secretary Steven Mnuchin today that Beijing was "ready to defend its national interests" but hoped that "both sides will remain rational and work together," according to China's official Xinhua news agency.

He also accused a US probe into Chinese intellectual property practices of violating international trade rules.

China had warned the United States yesterday that it was "not afraid of a trade war" as it threatened tariffs on USD 3 billion worth of US goods in retaliation. And French President Emmanuel Macron said Europe would respond "without weakness" to Washington's threats of tariffs on steel and aluminium.

"Nothing should be addressed when it is with a gun to your head," he said at the end of an EU summit in Brussels.

Global stocks have plummeted as fears rise that the confrontation could provoke a damaging trade war. Meanwhile, World Trade Organization Director-General Roberto Azevedo called for cooler heads to prevail, saying in a statement that new trade barriers would "jeopardise the global economy".

But speaking to reporters yesterday as he signed new budget legislation, Trump said his efforts were beginning to bear fruit.

Washington this week said it would temporarily exempt Europe as well as countries including Brazil, Argentina, South Korea and Australia from the steep new steel and aluminium tariffs that Trump unveiled this month and which took effect yesterday.

European and US trade officials said this week they were beginning talks to reach a compromise.

"Many other countries are now negotiating fair trade deals with us," Trump said Friday.

"Part of the reason, frankly, that we're able to do that is the fact that we have the tariffs on steel and the tariffs on aluminium."
Betty Wang, an economist at ANZ bank, said China's reaction was "relatively mild."
Senior White House economic advisor Everett Eissenstat said Thursday the new US import duties would target sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from US companies."