Trump and China look headed for a double-barrelled trade and currency war with neither backing down
- China hit out at Trump, accusing the US president of "bullying" over his aggressive tactics in the trade conflict between the two nations.
- It warned, however, that it is ready to "rise up" to an escalated trade war.
- "This unyielding nation suffered foreign bullying for many times in history, but never succumbed to it even in the most difficult conditions," commerce minister Zhong Shan said.
- Separately, US Treasury secretary Steven Mnuchin said that his department continues to monitor China's actions with regards to its currency, the renminbi.
China's government has hit back at the Trump administration, accusing the US president of "bullying" over his aggressive tactics in the escalating trade conflict between the two nations, saying it will "rise up" should a full-scale trade war break out.
"China doesn't want a trade war, but would rise up to it should it break out," Zhong Shan, China's minister for commerce said in a statement.
So far, the Trump administration has placed tariffs on $250 billion (R3.7 trillion) worth of Chinese goods, affecting more than 5,000 products. The president, however, has said he is willing to "go to 500"- a colloquial term for placing tariffs on all US imports from China.
What was initially seen as an empty threat is now viewed by many observers as a genuine possibility after the latest round of tariffs were announced in late September, after which Trump doubled down on his threats to tax all Chinese imports. Such threats, Zhong said, will not lead China to back down and offer the US concessions.
"There is a view in the US that so long as the US keeps increasing tariffs, China will back down. They don't know the history and culture of China," he said.
"This unyielding nation suffered foreign bullying for many times in history, but never succumbed to it even in the most difficult conditions," he continued.
"The US should not underestimate China's resolve and will."
Zhong's comments came just a few hours after President Trump once again accused China of taking advantage of the US over trade.
"We can't have a one-way street," Trump said during a press conference to discuss the resignation of UN Ambassador Nikki Haley on Tuesday afternoon.
"It's got to be a two-way street. It's been a one-way street for 25 years. We've got to make it a two-way street. We've got to benefit also," he told reporters.
Alongside increasing tariffs, communications between the two sides have become more and more strained in recent weeks. China in September called off planned talks between mid-level officials, and this week US Secretary of State Mike Pompeo exchanged displeased words with Chinese foreign minister Wang Yi during a trip to Beijing.
"Recently, as the US side has been constantly escalating trade friction toward China, it has also adopted a series of actions on the Taiwan issue that harm China's rights and interests, and has made groundless criticism of China's domestic and foreign policies," Wang said at a press conference.
"We demand that the US side stop this kind of mistaken action."
Pompeo hit back, saying the US has "great concerns about the actions that China has taken."
A currency war brewing?
Away from the escalating tensions over trade, the US Treasury has shown new concern about China's devaluation of the renminbi, an action it believes Beijing is using to strengthen its hand with regard to trade by making Chinese goods cheaper.
"As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations," Treasury secretary Steven Mnuchin said in an interview with the Financial Times published on Wednesday.
"We are going to absolutely want to make sure that as part of any trade understanding we come to that currency has to be part of that."
Trump has frequently criticised China for his belief that Beijing is artificially weakening its currency to make Chinese exports more competitive, something he believes Beijing is doing to hurt the US economy.
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