While calling for peace and stability, China is reportedly arming itself for a trade war with the U.S.
President-elect Donald Trump’s hawkish rhetoric on China, particularly with regard to trade, has some observers concerned that a trade war may be imminent. Although China appears to be hoping for the best, it is not planning on taking any chances.
“No one will emerge as a winner in a trade war,” Chinese President Xi Jinping said Tuesday during a speech at the World Economic Forum in Davos, Switzerland. At the same time, China is preparing for the possibility.
“China is already preparing measures in the event of actions by the new administration,” Lester Ross, head of the policy committee for the American Chamber of Commerce in China, revealed Wednesday.
“It is not as though China is without arsenals that it could take in response to actions of the United States,” he added.
Trump has repeatedly threatened to tax Chinese exports, promising to impose tariffs as high as 45 percent. The president-elect believes China is taking advantage of the U.S. by engaging in unfair, predatory trading practices.
Trump has also nominated several China hawks, such as “Death by China” author Peter Navarro, for economic and trade positions within his administration.
“China has indeed threatened to and is preparing to take steps in retaliation if such actions take place,” Ross asserted.
“We should stay vigilant. We have to be prepared,” Li Yonghui, head of the School of International Relations at Beijing Foreign Studies University, told the Guardian last month, “Trump will certainly place unprecedented pressure on China.”
“China is now preparing some weapons,” Cheng Dawei, a former trade advisor to Beijing, told the Wall Street Journal. She argued that China’s Ministry of Commerce is likely very busy now.
The commerce ministry has been restrained in its verbal responses to Trump, but it has been active behind the scenes.
Referring to recent anti-dumping cases, Mei Xinyun, a Ministry of Commerce researcher, told the Washington Post, “We don’t want to get into a row with you, but we will take action.”
“Trump will need to pay the price should he want more trade friction,” he added.
A trade war between the first and second largest economies would put hundreds of billions of dollars in bilateral trade in jeopardy, and many other countries would suffer setbacks as collateral damage.
China has been consistently warning that a trade war would be detrimental to both sides.
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