On the heels of US President Trump’s announcement of tariffs worth $50 billion to be imposed on China’s exports for the thievery of intellectual property, China has declared that it is not afraid of a trade war, and vowed to fight to the end.
In a tit-for-tat move China’s embassy in Washington issued a statement in response to President Trump’s trade actions, saying “China would fight to the end to defend its own legitimate interests with all necessary measures.”
The threat of a China-US trade war caused a shock to the stock market. The possibility of endangered trade relations between the two biggest economies in the world cause the Dow to fall by nearly 3 percent (724 points) on March 22.
Aside from the tariffs, President Trump announced that his administration also plans to limit investments from China, and within 15 days will make public the products on which tariffs will be imposed.
China called the US sanctions against intellectual theft, including that of US patents and software, as “self-defeating” and ultimately harmful to the businesses, consumers and finance markets in the US. The statement from China further urged the US to cease and desist, “make cautious decisions, and avoid placing China-US trade relations in danger with the purpose of hurting others that eventually end up hurting itself.”
An investigation conducted by the office of the US Trade Representatives in the last seven months has resulted in conclusions concerning how China harms technology companies in the US in different ways, such as the case when tech companies from the US seek access to the Chinese market. They are required by China to start joint ventures with local companies, giving their partners access to their software. The Chinese companies then steal this software, and edge the US firms out of the market.
According to the Chinese embassy, China has shown good faith toward the US by making endeavors to solve the trade imbalance between the two countries, and has made “reasonable suggestions to the US.”
Although a number of officials acknowledge China’s theft of trade secrets and technology, and economists perceive that the Trump administration has accurately pointed this out, they have also pointed out the danger of retaliation from the Chinese, which will mean higher prices for goods, fewer jobs and a blow to the economy in general, should widespread tariffs be imposed.
US officials have downplayed fears of an out-and-out trade war, but admit concerns about blowback from China.
Shortly before President Trump’s statement on trade actions against China, Robert Lightizer, US Trade Representative, recently said that more countries are exempt from the tariffs on steel and aluminum the President announced three weeks ago. These tariffs, which are 25 percent on steel and 10 percent on aluminum, are set begin on March 23. However Brazil, Australia, South Korea, Argentina and the EU are unaffected by these penalties. Canada and Mexico were previously exempted.