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China says it is ready to hit back fuelling fears of trade war with US

Chinese steel accounts for less than 1% of US imports, but China will not 'sit idly by' if US damages its economic interests, says spokesman

BEIJING China warned yesterday that it was ready to hit back if the United States damaged its economic interests, fuelling fears of a trade war after President Donald Trump unveiled tariffs on steel and aluminium.

"China doesn't want a trade war with the United States," Mr Zhang Yesui, spokesman for the National People's Congress, said yesterday, on the eve of the parliament's annual session.

"But if the US takes actions that hurt Chinese interests, China will not sit idly by."

Mr Zhang warned that "policies informed by misjudgement or wrong perceptions will hurt relations and bring consequences no side wants to see".

Mr Trump's announcement came as President Xi Jinping's top economic aide, Mr Liu He, met US officials at the White House.

During his visit, according to the official Xinhua news agency, Mr Liu and his hosts "agreed that the two countries should settle their trade disputes by cooperation rather than confrontation".

After announcing plans to impose a 25 per cent tariff on steel imports and 10 per cent on aluminium, Mr Trump boasted via Twitter on Friday that "trade wars are good, and easy to win".

China has been the main target of Mr Trump's rhetoric over the US trade deficit since his presidential campaign, but its steel and aluminium exports to the US are minimal.

China is the world's largest steel producer but it accounts for less than one per cent of US imports and sells only 10 per cent of its wrought aluminium abroad.

HURTING OTHER COUNTRIES

Steel producers in Canada, Brazil, Mexico, South Korea and Turkey rely far more heavily on the US market.

"The American action to put sanctions on other countries' reasonable steel and aluminium exports in the name of harming national security is groundless," China's foreign minister Wang Yi said on Saturday.

A major South Korean business lobby, the Federation of Korean Industries, said yesterday it sent letters to US officials seeking an exemption.

A US official said on Friday possible exemptions would be considered case-by-case.

Australia warned that a trade conflict could put the brakes on global economic growth.

"That's what concerns me, if we continue to see an escalation of rhetoric and, ultimately, action around tariffs applying for imports and exports across multiple economies... this will lead to a slowdown in growth," trade minister Steve Ciobo told Sky News Australia yesterday .

- AFP

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