Ahead of Trump's steel and aluminum tariff announcement, now tentatively expected to take place around 11am, China said it was "seriously concerned" over U.S. criticism of China’s economic growth model and related policies in its annual report on trade-policy agenda, China Ministry of Commerce said in statement on website.
The U.S. trade-policy report is ignorant of China’s "huge" accomplishments in building market-based economy and the fact that China sticks to commitments to WTO.
According to Beijing China and the U.S. should manage and control differences in constructive ways while avoiding politicizing economic, trade issues. The two nations should also improve communications and open markets to each other, and solve key concerns of both sides appropriately.
As a reminder, yesterday President Trump warned that the U.S. will use “all available tools” to prevent China’s state-driven economic model from undermining global competition, in his latest warning to Beijing as America readies a host of trade actions.
According to the president’s annual report to Congress on his trade-policy agenda, China hasn’t lived up to the promises of economic reforms it made when it joined the World Trade Organization in 2001, and actually appears to be moving further away from “market principles” in recent years. The report also accused that China’s “statist” policies are causing a “dramatic misallocation” of global resources that is leaving all countries poorer than they should be.
And the most direct threat was the following line in the report: "China is free to pursue whatever trade policy it prefers. But the United States, as a sovereign nation, is free to respond."
The president is weighing several options for curbing imports of steel and aluminum, and Trump has told confidants he’s considering a global tariff on steel of 24 percent, the most punitive alternative recommended by his officials. The administration is ready to act unilaterally if necessary to fight unfair trading practices, according to trade report.
Meanwhile, Xi has called for countries to avoid protectionism and stick to the current path of globalization. At the same time, Chinese officials are weighing raising tariffs on U.S. soybeans as tensions escalate.
There will likely be discussions over such trade irritants when Liu, who sits on China’s 25-member Politburo, meets with a group of Trump’s most senior economic advisers on Thursday, including Gary Cohn, Treasury Secretary Steven Mnuchin and Lighthizer. He’s also expected to talk with Susan Thornton, the State Department’s acting assistant secretary for East Asia and the Pacific.
For now, however, one thing is without doubt: China is winning the trade battle with the US.
It still remains to be seen if US-Chinese relations turn into an all out trade war as Trump tries to change the direction of the trend shown above.