Abril 24, 2018

Chinese president warns of Cold War mentality amid U.S. tariff row

10 Abril 2018, 11:24 | Dolorita Barahona

MONEY & MARKETS: China's President Xi moved to ease concerns about global trade — and financial markets love it

Honour guards prepare for the ceremony to welcome Greek Prime Minister Alexis Tsipras at the Great Hall of the People in Beijing China

China responded within hours by threatening 15% to 25% tariffs that would affect $3 billion worth of US trade.

Navarro has said that high-level talks will take place before any tariffs will take effect, led on the USA side by Mnuchin and Trade Representative Robert Lighthizer.

As President Xi Sounded like a concessionist, global stock market resumed rally. The Dow Jones industrial average rose as much as 400 points in early trading.

While Chinese leadership often condemns protectionism and promotes multilateral cooperation in globalized, China stands accused of practicing protectionism and engaging coercive economic aggression.

China must provide a good business environment to compete, and not just use the old tricks of lower taxes, cheap land and subsidies, Xi said.

Even with the US tariffs, China can still reach its 2018 GDP growth target of around 6.5 percent and the impact on employment will be limited, Wang Changlin, a researcher at the National Development and Reform Commission (NDRC), wrote in a post on the commission's official microblog account.

In China, state researchers and media talked down the likely impact of USA trade measures on the world's second largest economy and described the Trump administration's posturing on trade as the product of an "anxiety disorder". Beijing also declared that the current rhetoric made negotiations impossible, even as the White House suggested that the tariff talk was a way to spur China to the bargaining table.

Trump was referring to China's threats to impose tariffs on US soybeans, frozen beef and other agricultural goods, which have already pushed down prices for those commodities.

Investors across the globe are bracing for uncertain markets as President Donald Trump tries to downplay fears of a trade dispute between the USA and China.

"You hope that reason prevails", said Dollar, a former official at the World Bank and U.S. Treasury Department.

The Japanese yen, which traditionally rises in times of market stress, fell versus the dollar and euro.

Trump had sounded an optimistic tone on Sunday, playing up his personal relationship with Chinese President Xi Jinping.

United States companies have also complained that Chinese authorities do not allow them open access to markets and discriminate against them when they compete with Chinese rivals, the report said.

"Xi threw the ball into the US court but it appears China is laying the groundwork to achieve an agreement with the U.S".

Vowing to shield USA farmers from Chinese retaliation, Trump said on Monday: "If, during the course of a negotiation, they want to hit the farmers because they think that hits me, I wouldn't say that's nice".

"Oil prices have been susceptible to the brewing trade tensions between China and the U.S. However, fundamental support levels have been demonstrated with OPEC's suggestion on a production limit extension into 2019", said Singapore-based Phillip Futures.

Promising a "new phase of opening up", he said China will "considerably lower" tariffs on cars and other products this year, take measures to liberalise automobile investment, and protect intellectual property - all areas that have been high on the list of demands by Washington. South Korean companies with factories in China that produced products for export to the United States or companies inside Korea exporting via China "will likely be hurt", according to the report.

Skeptics pointed out that China has made promises before and then not adhered to them.

More: As Trump calls U.S.

Xi vowed to greatly improve market access, strengthen the protection of intellectual property rights, and expand imports by reducing trade barriers.

Beijing has threatened to retaliate if Washington follows through with its proposed tariffs. If that fails, China can ask for a ruling from a WTO panel. But business groups from outside China argue that joint venture and licensing rules make coerced transfers of technology unavoidable.

But he gave no details or an exact date for taking the measures. Trump has "demonstrated a resoluteness, and that signals to China's leaders that we're serious".

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