BEIJING: The US should not act “emotionally” and avert a trade war, Chinese Premier Li Keqiang today said, hoping to reach an agreement with Washington over the mounting USD 375 billion trade deficit, a core concern of President Donald Trump.
Trump recently announced hefty trade tariffs on import of steel and aluminium, targeting strategic rival China among other countries.
Trump’s move to impose of 25 per cent on foreign steel and 10 per cent on aluminium also gave rise to speculation of a possible trade war between the US and China
Li, while answering a question in his annual press conference here on pressure being mounted by Trump on China to take measures to address the trade deficit after imposing tariffs on steel and aluminium said, “No one will emerge a winner from a trade war”.
China has the lion’s share of over USD 580 billion in bilateral trade with the US. The trade deficit for the US amounted to over USD 375 billion last year.
Since he took over power Trump has been pressuring China to step-up measures to reduce trade deficit and expand US exports and investments. China signed major trade deals worth about USD 250 billion, including buying 300 planes from Boeing during Trump’s visit here last year.
“What we hope is for us to act rationally rather than being led by emotions. We don’t want to see a trade war,” Li said.
China had rushed its top diplomat Yang Jiechi followed by Chinese President Xi Jinping’s economic advisor Liu He to the US to pacify Trump administration to avert a trade war between the two countries.
Asked whether China will use it’s over USD 1 trillion holdings of the US government debt as leverage in a dispute, Li said China’s investments are based on market principles and “China will remain a responsible long-term investor”.
China is the biggest holding in the US government debt last year mounted to USD 1.19 trillion. China has the world’s largest foreign exchange reserves of over USD 3.14 trillion.
A trade “war” would go against the principles of trade negotiation, consultation and dialogue, Li said.
Playing down Trump threats, Li said last year that China-US trade reached about USD 580 billion. Such a substantial trade volume could not have been achieved without business rules and market principles, he said.
“A large trade deficit is not something [that] we want to see. What we want is balanced trade, otherwise bilateral trade would not be sustainable,” he said.
China is going to further open services and manufacturing, which Li believes will create opportunities for the US.
Li hoped that the US will also ease its restrictions on the export of its high-tech and high value-added goods to China.
He added that intellectual property rights will be protected in a “strict way”.
As the world’s largest developing and developed countries, China and the US are highly complementary in economy, and a stable China-US relationship is in the interests of both countries and the whole world, he said.
China will remain a responsible and long-term investor globally, Li said. “It is unnecessary to worry about China’s development”-PTI
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