Washington’s ‘capricious’ trade actions will hurt US workers, China warns

BEIJING: China´s commerce ministry on Thursday accused the United States of being "capricious" over bilateral trade issues, and warned that the interests of U.S. workers and farmers ultimately will be hurt by Washington´s penchant for brandishing "big sticks".

Previous trade negotiations with the United States were constructive, but Beijing has had to respond in a strong manner due to the U.S. tariff threats, commerce ministry spokesman Gao Feng said.

President Donald Trump threatened on Monday to hit $200 billion of Chinese imports with 10 percent tariffs if Beijing retaliates against his previous announcement to target $50 billion in imports.

The United States has accused China of stealing U.S. intellectual property, a charge Beijing denies.

Washington´s accusations of forced tech transfers are a distortion of reality, and China is fully prepared to respond with "quantitative" and "qualitative" tools if the U.S. releases a new list of tariffs, Gao told a regular briefing in Beijing.

China could hit back at U.S. firms listed on the Dow Jones Industrial Average if Trump keeps heightening tension with Beijing over trade, state-controlled Chinese tabloid the Global Times said on Thursday.

"It is deeply regrettable that the U.S. has been capricious, escalated the tensions, and provoked a trade war," Gao said. "The U.S. is accustomed to holding ´big sticks´ for negotiations, but this approach does not apply to China."

White House trade adviser Peter Navarro, who views China as a hostile economic and military power, said on Tuesday Trump´s actions were a necessary defence of the "crown jewels" in the U.S. economy.

None of the U.S. administration´s efforts to negotiate with Beijing had yielded progress on changing China´s "predatory" trade practices, Navarro said.

Fending off criticism from some Western countries, China has said it is willing to boost imports and widen market access.

In April, President Xi Jinping told a high-profile Chinese forum that import tariffs would be cut on goods such as cars, among other promises.

In May, Beijing said it would lower import tariffs on 1,449 consumer goods, starting from July 1."I´ve been honouring my words with actions," Xi told a group of foreign chief executives in Beijing on Thursday.

Xi said countries should not fight among themselves, but instead cooperate and meet challenges together, adding that the last global financial crisis happened not too long ago.

"We still have vivid memories of what happened during the financial crisis and we are not yet fully recovered," he said. "We must also stay vigilant because, as economic growth still lacks momentum, we have seen a surge of trade protectionism, isolationism and populism."

Global financial markets have shuddered this week amid worries about open trade conflict between the world´s two biggest economies.

Three rounds of high-level talks since early May failed to reach a compromise on U.S. complaints over Chinese practices and its record deficit with China.

Last year, the deficit was about $375 billion, as China imported $129.89 billion of U.S. goods, while the United States purchased $505.47 billion of Chinese products, according to U.S. data. A Sino-U.S. trade war could disrupt global supply chains for the tech and auto industries, sectors heavily reliant on outsourced components, and derail world growth.

"U.S. unilateral protection measures will ultimately harm the interests of U.S. companies, workers and farmers," Gao told reporters. British forecaster Oxford Economics, in a recent note, said it "will not be easy for the U.S. to identify $200 billion worth of Chinese imports that it can levy tariffs on without hurting U.S. companies and/or consumers, given the strong involvement of U.S. companies in a large share of China´s exports to the U.S."

Gao said China and the U.S. were due to negotiate on issues around the manufacturing and service industries in the near future. Chinese shares fell on Thursday on investor worries about the trade dispute, with the Shanghai index languishing at a two-year low and stocks of about 100 firms down by the daily limit of 10 percent.

"I suspect that the U.S. indices will start to sniff out the specific losers from this trade war, and individual stocks will get hurt much more than the broad index as investors understand this isn´t going to kill global growth," Andrew Polk, co-founder of research firm Trivium China, told the Reuters Global Markets Forum.

"But it will impact some companies disproportionately." China said it would impose additional tariffs on 659 U.S. goods, with duties on 545 to kick in on July 6, after Trump said Washington would levy tariffs on $50 billion of Chinese products.