Published: Mon, August 06, 2018
Global News | By Stacy Ballard

US, EU forming 'united front' against China

US, EU forming 'united front' against China

Beijing said that it would retaliate with import duties on thousands of American products, including aircraft and liquified natural gas, if President Trump moved forward with plans to target Chinese goods worth $200 billion with a 25 per cent levy.

China signaled Friday that it has no intention of retreating from a trade war. According to Reuters, the Chinese commerce minister said in a statement after the latest round of tariff threats that the United States had "repeatedly escalated the situation against the interests of both enterprises and consumers".

The commerce ministry issued a statement saying the new duties would be applied if Washington pulled the trigger on President Donald Trump's threat to raise tariffs on 200 billion worth of Chinese goods. When a big US retail chain or an equipment manufacturer has to pay 10 or 25 percent more to get steel from Canada or a certain part from China, that USA company has to pay the tax when it imports that item.

China's new threat targeting a smaller amount of USA goods reflects the fact that Beijing is running out of products for retaliation due to its lopsided trade balance with the United States.

"The implementation date of the taxation measures will be subject to the actions of the United States, and China reserves the right to continue to introduce other countermeasures", China's Ministry of Commerce said in a statement. "So, the basic foundation of US-China cooperation is very strong", he added.

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Beijing has insisted its measures are "rational" and warned the United States its tactics would not work.

Mr Trump's senior advisers, particularly White House National Economic Council Director Larry Kudlow and Treasury Secretary Steven Mnuchin, have said the White House's ultimate goal is to remove tariffs and trade barriers in a way that makes "free and fair trade", but Mr Trump's message on Saturday evening was one of protectionism and economic restrictions, not open markets.

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The result is that both China and the USA are now using government funds to stimulate areas of the economy.

A piece in the Global Times, a tabloid run by the People's Daily, described the retaliatory measures as "rational" and insisted China "will not rush to compete with U.S. numbers".

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China urges the United States to relax its controls over exports to China, and protect and promote the high-tech trade and cooperation between companies from both countries, the ministry said. "So we'll have a united front against China".

Kudlow added: "We will not let China steal our technology". But there are major obstacles in the way of further negotiations.

"The White House's extreme pressure and blackmail are already clear to the worldwide community", said a state television commentary. Last May, when talks were held in Washington, China agreed to increase its imports from the U.S. by up to $100 billion in return for at least a suspension of hostilities. But Trump's threats and announcements do not constitute a trade war. Much of the trade war with allies is really about US domestic politics and the upcoming US November midterm elections. "Those are the things that concern us the most".

Chinese leaders have offered to purchase more American goods, but rejected the U.S. request to change technology policies they see as a path to prosperity and global influence.

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