China is ready for both a trade war and talks

Source:Global Times Published: 2018/3/24 17:54:02

Chinese Vice Premier Liu He had a phone conversation with US Secretary of Treasury Steven Mnuchin Saturday morning. The talks generated much attention at the time when Washington moved to slap high tariffs on $50 billion worth of products from China, and Beijing had decided to strike back with retaliatory measures.

The Trump administration had hoped to overwhelm China with the threat of a trade war. They had thought China would be pressured to make concessions in view of China-US trade and overall bilateral relations.

After announcing the restrictive tariffs on Chinese products, Washington tried to appease Beijing, claiming that "there won't be a trade war with China." It hopes Beijing will accept the comforting words and give up its business interests according to Washington's will. However, China's response is resolute and clear that it won't accept US extortion. China doesn't want a trade war, but it will not be afraid if the US starts it.

The plan China unveiled Friday to impose tariffs on $3 billion worth of products from the US is in retaliation to US tariffs on Chinese steel and aluminum products. More importantly, China's retaliation against the 301 investigation will target US products worth tens of billions of dollars. Beijing's countermeasures are expected.

Intimidating China won't work. If Washington moves ahead with a trade war, it will mire itself in great loss. A day after President Trump signed the executive memorandum, the prospect of a US trade offensive against China is clear.

China and the US can choose to negotiate after both suffered considerably from a trade war. They can also start talking now after weighing each other's leverage and deducing carefully. China has been consistent that it is ready to talk and also prepared to fight at any time.

Mnuchin called Liu and both sides agreed to maintain communications over the issue. We hope that Mnuchin's phone call at this critical juncture can make the US side more rational, instead of leading to more high stakes.

It's hard to predict what impact a trade war between China and the US will have on their economies, social life and politics. But there are a few things that are clear.

First, Chinese society will be more united than American society in the face of the trade war. Most Chinese will firmly support every countermeasure the Chinese government makes because they know this is essential to safeguarding their interests. The US is already divided on the issue. This opposition will rise when the US suffers more from the trade war.

Second, China has a system advantage that enables the country to be more resilient to the impact of a trade war than US society. China doesn't fear a long trade war with the US and will never be the first one to retreat.

Third, China has been well prepared for possible rising tensions with the US brought about by the trade war. China has the strength to resolutely hit back if the US uses non-economic means to aid the trade war.

China doesn't support a trade war, but it is determined and prepared not to be the defeated side. To have a trade war or talks, that's the US' call.

Posted in: EDITORIAL

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