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Trade war: China ready to defend interests, but hopes US can meet halfway

The commerce ministry spokesman said China is prepared to respond to all possible outcomes

Reuters  |  Beijing 

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'Mentally and materially, China is much better prepared than its US counterpart.'

China is fully prepared to defend its interests in its trade war with the United States, but hopes the can resolve problems through dialogue instead of unilateral steps, the Chinese commerce ministry said on Thursday.

The comments came as a Chinese delegation led by was set to hold talks in on Thursday and Friday aimed at salvaging a deal that appeared to be unravelling after US officials accused China of backtracking on earlier commitments and threatened to hike tariffs on Chinese goods on Friday.

Speaking to reporters in Beijing, the commerce ministry's spokesman, Gao Feng, said China has the determination and capacity to defend its interests, but hopes the US can meet it halfway.

"China's attitude has been consistent, and China will not succumb to any pressure," Gao said. "China has made preparations to respond to all kinds of possible outcomes."

He did not elaborate.

The US Trade Representative's office said tariffs on $200 billion of Chinese goods would rise to 25 percent from 10 percent at 12:01 a.m. (0401 GMT) on Friday.

These include chemicals, building materials, furniture and some

The US action would come in the middle of the meetings in

Trump also threatened on Sunday to levy tariffs on an additional $325 billion of China's goods, on top of the $250 billion of its products already hit by import taxes.

Until last weekend, when a deep rift opened up over the language of the proposed accord, there had been strong expectations that the two sides would reach a deal to de-escalate a war that broke out last year.

Reaching a deal required effort from both sides, Gao said, adding that China had demonstrated its sincerity by sending its negotiators to despite the US threat to raise tariffs.

Trade negotiations are a long process, and it is normal to have disagreements, Gao said, adding that China is willing to continue talks with the to resolve their trade dispute.
 

While the wants to reduce the scale of its trade deficit with China, it is also seeking better protection for American intellectual property and more market access in China for US companies.

Gao described accusations about Chinese firms stealing tech secrets as unreasonable and said they were not based on facts.

Chinese retaliation

Since July last year, China has cumulatively imposed countertariffs of up to 25 percent on about $110 billion of US products. It last levied tariffs, of 5 percent to 10 percent, on $60 billion of US goods including liquefied and small aircraft in September.

Based on 2018 US Census Bureau trade data, China would only have about $10 billion in US imports left to levy in retaliation for any future US tariffs, including and large aircraft.

Chinese on Thursday published and aired reports quoting US-based organisations and individuals critical of Trump's decision to raise tariffs, though downplaying the impact of higher US tariffs on the Chinese

"China is well-prepared for an escalation in trade tensions. A variety of plans are in place, such as countermeasures for any rise, and favourable policies to minimise losses for Chinese enterprises," the Global Times, a tabloid published by the ruling Communist Party's People's Daily, said in an editorial.

"Mentally and materially, China is much better prepared than its US counterpart."

China's blue-chip CSI300 index has slumped about 7 percent so far this month on the renewed trade tensions. That compares with a smaller decline of about 2 percent in the benchmark S&P 500 index.

The Chinese yuan has also retreated to a four-month low against the dollar, crossing the psychologically key 6.80 level.

 

 

First Published: Thu, May 09 2019. 14:40 IST
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