China says trade war with USA will bring disaster

China says trade war with USA will bring disaster

"There is no victor in a trade war", he told reporters yesterday.

As we reported earlier, new tariffs on aluminium import were adopted in the United States of America this week.

A trade war between China and the United States would be disastrous not only for the two countries involved, but also the rest of the world, Beijing warned on Sunday.

Liu He, a senior Chinese economic and financial official met with US officials earlier this month and they have agreed that the two countries should settle their trade disputes by cooperation rather than confrontation.

China can handle any challenges and will resolutely protect its interests, but the two countries will continue to talk, he said.

Trump has called the tariffs a matter of national security while threatening to tax European auto imports and impose "reciprocal taxes" on countries that charge higher duties on USA goods than the United States now charges on their products.

Chinese leaders have threatened in the past to retaliate against raised trade barriers, but have yet to take direct action following Trump's announcement. China accounts for only a small fraction of US steel imports, but its massive industrial expansion has helped create a global glut of steel that has driven down prices.

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It is "important" to resolve the bilateral trade dispute through dialogue and to deepen economic cooperation between China and the United States, Zhong said.

"Today, I am defending America's national security by placing tariffs on foreign imports of steel and aluminum", Trump said in the White House.

Trump responded last week with a blanket tariff hike on steel and aluminum, another metal China's trading partners complain it oversupplies.

China's metals industry has urged the government to retaliate against the tariffs, but Chinese steel accounts for only a small part of USA steel imports.

China would like to solve differences via cooperation and seek win-win outcomes to benefit the two countries and help stabilize global economy, he added.

Zhong blamed the trade imbalance in part on controls over US high-tech exports to China, repeating a Chinese claim that Washington could narrow its trade deficit if it allowed Beijing to buy more "dual use" technology such as supercomputers and advanced materials with military applications.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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