Trump softens on China as Beijing ramps up rhetoric in show of toughness over trade spat

Trump says China ‘will take down’ trade barriers as Beijing’s mouthpieces accuse Washington of abusing national security reviews and warn that Beijing has plenty of ammunition for a fight

PUBLISHED : Sunday, 08 April, 2018, 10:37pm
UPDATED : Monday, 09 April, 2018, 1:29pm

US President Donald Trump sent a friendly message to China on Sunday as Chinese state media ramped up their rhetoric in the trade dispute with the US, recalling China’s Korean war mettle and warning Washington that it was becoming the enemy of a multipolar world.

“President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do,” the US president tweeted.

“Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!” Trump added.

China-US trade talks hit dead end but ‘there’s still room to move’

Trump’s message came as the US and China are teetering on the brink of trade war and the Chinese side is putting a tough face.

In a commentary on Sunday, Xinhua News Agency said the trade tensions were a “fight between unilateralism and multilateralism, and a fight between protectionism and free trade”.

“The US is set to become a public enemy of global multilateralism,” it said. 

The Global Times, a nationalist tabloid in the People’s Daily stable, called on China to prepare for the worst as the US sought to stop China’s rise. 

“The same sort of strategic resolve that China had in the Korean war is being built up across the country to beat the Trump administration’s trade attack,” it said in an editorial on Saturday.

The comments follow the White House’s decision to impose 25 per cent punitive tariffs on more than 1,300 Chinese goods after the Office of the US Trade Representative accused China of forced technology transfers, discriminatory intellectual property policies and government involvement in outbound acquisitions. 

Trump threatened on Friday to slap tariffs on additional US$100 billion worth of Chinese products.

China has responded with duties on more than 100 US products, including soybeans, cars and aircraft, and says it has drafted other detailed countermeasures. 

Citing State Intellectual Property Office senior official Zhang Zhicheng, Xinhua said the US’ accusations over technology transfers, IP and innovation were groundless and the tariffs would damage the US economy as well as that of the wider world.

Could services be next in China’s sights to defend its interests ‘at any cost’ in a US trade war?

Trump has also ordered the US Treasury Department to work on measures to address China’s acquisitions of US technology. Separately, the US Congress has been working on revising the rules of the Committee on Foreign Investment in the United States to expand its power to scrutinise overseas investment, especially from China, on national security grounds. 

Communist Party mouthpiece People’s Daily quoted Ministry of Commerce researcher Zhou Mi as saying the US had abused national security reviews to block Chinese investment in the US and the administration’s intervention had become “increasingly frequent and direct”. 

The US had not only set up “iron door” to limit the market access of foreign capital but also played tricks to hamper investors’ post-investment operations, putting Chinese investors in a weak position and offering them few solutions, People’s Daily said. 

But China had ample weapons and ammunition to fight a trade war, the Global Times said.

“The suffering from a trade war will stimulate China to … innovate, which may offer a chance for China to more quickly narrow the gap in national power with the US,” it said. 

Meanwhile, the China Chamber of International Commerce said that since the US tariff announcement its members had reported greater problems with honouring trade contracts and sharp rises in default risks. 

“The US has severely disturbed the normal order in global trade and caused immeasurable losses to both countries’ industrial and business sectors,” the chamber said in a statement on Friday.