China says trade war with US will only bring disaster to global economy

Any trade war with the United States will only bring disaster to the world economy, Chinese Commerce Minister Zhong Shan said on Sunday, as Beijing stepped up its criticism on proposed metals tariffs by Washington amid fears it could shatter global growth

After pressure from allies, the United States has opened the way for more exemptions from tariffs of 25 percent on steel imports and 10 percent on aluminium that US President Donald Trump set last week.

On Saturday, the European Union and Japan urged the United States to grant them exemptions from metal import tariffs, with Tokyo calling for “calm-headed behavior.”

But the target of Trump’s ire is China, whose capacity expansions have helped add to global surpluses of steel. China has repeatedly vowed to defend its “legitimate rights and interests” if targeted by US trade actions.

Zhong, speaking on the sidelines of China’s annual session of parliament, said China does not want a trade war and will not initiate one.

“There are no winners in a trade war,” Zhong said. “It will only bring disaster to China and the United States and the world.”

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

“Nobody wants to fight a trade war, and everyone knows fighting one harms others and does not benefit oneself.”

Trump’s announcement on tariffs underlined concerns about rising US protectionism, which has sparked bouts of turmoil in global financial markets as investors feared a damaging trade spat would shatter a synchronized uptick in world growth.

China’s metals industry issued the country’s most explicit threat yet in the row, urging on Friday for the government to retaliate by targeting US coal - a sector that is central to Trump’s political base and his election pledge to restore American industries and blue-collar jobs.

The US is the world’s biggest importer of steel, purchasing 35 million tons of raw material in 2017. Of those imports, South Korea, Japan, China and India accounted for 6.6 million tons.

Trade tensions between China and United States have risen since Trump took office. 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.