US and China must step back from brink of trade war, says Dutch Prime Minister

Dutch Prime Minister Mark Rutte has urged the US and China to scale back their trade dispute, adding that the EU should be cautious about getting involved in the confrontation.

“[Trade tensions] will help nobody,” Rutte told the South China Morning Post. 

“We are focusing on de-escalating tensions … we are calling on the US to make sure they work in the multilateral system and China to acknowledge where the [trade] imbalances are,” he said on Monday, during a visit to Hong Kong.

He also urged the US to use the World Trade Organisation to resolve its trade disputes. 

Rutte urged China to further open up its markets to goods and services, calling for a more level playing field for foreign companies and for progress in improving patent protection and clarity over companies’ legal rights. 

Rutte’s stance reinforces the EU’s calls for Beijing to open up its markets after the US and China imposed tariffs on each other’s imports.

The EU has declined to respond directly to China’s invitation to join it in fighting America’s protectionist measures. 

Yet, with China and the US on the brink of a full-scale trade war, the EU is faced with a dilemma. It shares Washington’s grievances about China’s trade practices and trade deficit, but is also being threatened by US protectionism. 

Rutte pointed out that the EU was the largest trading bloc in the world and said he was not worried about being caught up in the middle, “but we do have to be very careful”.

Currently, the Netherlands is China’s third biggest trading partner within the EU while the US and China are the country’s largest non-EU trade partners. 

The EU and the US also found themselves at risk of descending into a trade war last month after Trump threatened to impose tariffs on steel and aluminium imports that would, if confirmed, punish European manufacturers.

But Donald Trump granted Europe a last-minute exemption, giving EU negotiators until May 1 to come up with a solution to what the US president characterised as unfair trade policies.

However, the skirmishes between its two major trading partners have not stopped the Netherlands from moving towards closer trade and economic relations with China at the moment.

“In terms of trade, we are moving into new sectors [with China],” Rutte said, adding that the two sides were cooperating more closely in sectors such as health care and hi-tech machinery.  

Rutte is expecting over 30 contracts and MoUs (memorandum of understanding) to be signed between Dutch and Chinese businesses in the fields of agriculture, health, waste management and green transport during his trip in China, which also includes a visit to the Boao Forum in Hainan, and ends on April 12.