China is preparing a range of responses to planned U.S. tariffs and will stand up to protectionism, but it still hopes for dialog, Beijing’s ambassador to the World Trade Organization (WTO) said on Thursday.
Zhang Xiangchen said China was considering a WTO complaint against the package of tariffs that President Donald Trump is expected to announce later on Thursday.
“This is a legitimate right for China to do that. But I would not exclude other options, because if the flood approaches you have to bank up to keep it out,” he told Reuters.
Thursday’s tariff announcement is the first in a string of U.S. trade restrictions aimed squarely at China and intended to curb alleged theft of U.S. technology.
U.S. Trade Representative Robert Lighthizer said on Wednesday the tariffs would target China’s high-technology sector and could also include restrictions on Chinese investments in the United States. Other sectors like apparel could also be hit.
Trump’s protectionist trade policies have already caused a global outcry this year.
In January he slapped steep import tariffs on solar panels and washing machines and this month worldwide steel and aluminum tariffs have followed, justified by a claim to “national security” under a Cold War-era law.
The European Union, Canada, Mexico, Australia, Brazil and South Korea won exemptions from the steel and aluminum tariffs, Canada and Mexico, U.S. Trade Representative Robert Lighthizer said on Thursday.
The United States hopes that the national security claim will make the steel and aluminum tariffs immune to a challenge at the WTO, but Zhang said they failed to pass the WTO test of being “essential” for national security.
“No one has seen the essential national security rationale behind the U.S. measures,” he said. “Even the senior officials of the United States fail to hide the real reasons.”
Thursday’s anticipated tariffs, under Section 301 of the 1974 Trade Act, would be even more difficult to defend, Zhang said, because in a previous ruling Washington promised to deploy them with authorisation from the WTO.
“The U.S. commitment is still there. But it seems that today they would like to ignore it. This issue can be brought back to the WTO and it will be challenged again.”
China and other WTO members might also retaliate against the solar tariffs with their own tariffs on U.S. goods, Zhang said.
“My colleagues in the capital have been preparing those options and this response. We still cherish the multilateral trading system very much, although there’s a flavor of trade war in the air.”