Though the European Union has been the first to react to US President Donald Trump’s plan for a 25% tariff on steel imports, it is clear to everyone that China is the real target of the White House proposed trade war setup.
Mr Trump stated yesterday that: “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!”
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!</p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/971402791930552322?ref_src=twsrc%5Etfw">March 7, 2018</a></blockquote>
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In response, China’s foreign minister Mr Wang Yi rebuffed, claiming: “Especially given today’s globalisation, choosing a trade war is a mistaken prescription. The outcome will only be harmful.”
“China would have to make a justified and necessary response”.
Mr Wang, speaking at the Communist party’s meeting admitted that the Chinese still had some road to cross before catching up with the US but that it “will not and need not displace the United States”.
Just last year, China ran a trade surplus with the United States of a stunning figure of $375.2bn. Ever since Trump took office, this trade imbalance has been in focus, and even though the US only imports a small fraction of its steel from China, those imports are what have driven the price of steel down globally and have thus priced the US itself out of the production market.
Earlier this week, his former chief strategist, Mr Steve Bannon also spoke on the looming Chinese trade war when he stated that “Not everyone will like the steel tariffs” whilst as the same time praising President Trump for “pulling the trigger on China.”