Breaking News
0

Exclusive: China to respond to U.S. tariffs, resist protectionism - WTO envoy

Stock MarketsMar 22, 2018 01:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Zhang, Chinese Ambassador to the WTO attends an interview with Reuters in Geneva

By Tom Miles

GENEVA (Reuters) - China is preparing a range of responses to planned U.S. tariffs and will stand up to protectionism, but still hopes for dialogue, Beijing's ambassador to the World Trade Organization (WTO) said on Thursday.

Zhang Xiangchen said China was considering a WTO complaint against the package of tariffs that President Donald Trump was expected to announce later on Thursday.

"This is a legitimate right for China to do that. But I would not exclude other options because, if the flood approaches, you have to bank up to keep it out," he told Reuters.

Zhang spoke before a senior White House official said Trump would sign a memorandum later on Thursday to potentially slap tariffs on $50 billion of Chinese imports over forced transfer of intellectual property.

The announcement is the first in a string of U.S. trade restrictions to be aimed squarely at China.

U.S. Trade Representative Robert Lighthizer said on Wednesday the tariffs would target China's high-technology sector and could also include restrictions on Chinese investments in the United States.

Trump's protectionist trade policies have already caused a global outcry this year.

In January, he slapped steep import tariffs on solar panels and washing machines and this month worldwide steel and aluminum tariffs have followed, justified by a claim to "national security" under a Cold War-era law.

The European Union, Canada, Mexico, Australia, Brazil and South Korea won exemptions from the steel and aluminum tariffs, Canada and Mexico, Lighthizer said on Thursday.

Asked about the exemptions, Zhang said that "appeasement of protectionism" would not work. "If you surrender to protectionism, you will lose your credibility."

The United States hopes that the national security claim will make the steel and aluminum tariffs immune to a challenge, but Zhang said they failed to pass the WTO test of being "essential" for national security.

"No one has seen the essential national security rationale behind the U.S. measures," he said. "Even the senior officials of the United States fail to hide the real reasons."

'A FLAVOR OF TRADE WAR'

Thursday's tariffs, under Section 301 of the 1974 Trade Act, would be even more difficult to defend, Zhang said, because in a previous ruling Washington promised to deploy them only with authorization from the WTO.

"The U.S. commitment is still there. But it seems that today they would like to ignore it. This issue can be brought back to the WTO and it will be challenged again."

China and other WTO members might also retaliate against the solar tariffs with their own tariffs on U.S. goods, Zhang said.

"My colleagues in the capital have been preparing those options and this response. We still cherish the multilateral trading system very much, although there’s a flavor of trade war in the air."

Asked about a possible U.S. WTO complaint about currency manipulation, Zhang said China had been prepared for such an argument since Trump mentioned it during his election campaign.

China is already under U.S. pressure at the WTO for its industrial overcapacity and its cyber security law.

Asked if China would invoke national security to avoid a WTO dispute over cyber security, Zhang said China would exercise self-restraint.

As well as deploying tariffs, the United States has undermined the WTO's ability to cope with disputes by vetoing the appointment of new appeals judges.

"If the United States has the intention to paralyze the system no one can stop this," he said, adding that China would keep trying to persuade Trump to unblock the system, although some in Geneva were talking about a plan B for the dispute settlement mechanism.

Zhang said he hoped for good relations with new U.S. ambassador Dennis Shea, who he said had promised to discuss the issue, and he did not want to consider a scenario of the WTO without the United States.

Exclusive: China to respond to U.S. tariffs, resist protectionism - WTO envoy
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email