China has expressed “grave concern” over US plans to impose tariffs on steel and aluminium, with the move likely to hurt US allies as well as Chinese producers.
Donald Trump’s announcement that the US will impose tariffs of 25% on steel imports and 10% on imported aluminium next week sent stock markets around the world tumbling and could prompt other countries to take action.
Steel and aluminum tariffs trigger sharp stock market sell-off in US and Asia
“The Chinese side expresses grave concern,” the ministry of commerce said. The statement did not mention any retaliatory steps but encouraged Washington to solve disputes through negotiation. Chinese officials have previously said they would take “necessary measures” to defend national interests.
Trump frequently singled out China for criticism during his election campaign, saying the trade relationship was “the greatest theft in the history of the world” and comparing it to “rape”. He also pledged to protect the US steel industry but this is the first major step in fulfilling those promises.
“We should cooperate and try to find ways to overcome this difficulty, rather than benefit oneself at the other’s expense and implement unilateral trade limitation,” said Hua Chunying, a foreign ministry spokesperson. “China urges the US to exercise self-restraint, not to implement trade protection tools, confront multilateral trading rules and make a contribution to global trade regulations.”
But the reaction in China from those most affected was fairly muted, likely because China is not even in the top 10 sources for US steel imports.
“The impact on China is not big,” said Li Xinchuang, vice secretary-general of the China Iron and Steel Association. “Nothing can be done about Trump. We are already numb to him.”
Canada has the largest share of steel imports to the US at 16%, according to data from the Department of Commerce. That is followed by Brazil and South Korea, with steel imports from China down 5% in the most recent period.
“If you really want to hurt China’s exports to the US you need to look at electronics and telecommunications items,” said Louis Kuijs, head of Asia economics at the Oxford Economics consultancy in Hong Kong. “It’s much harder to find agreement on that because many US companies would face collateral damage and it would raise prices for US consumers.”
Kuijs said the steel and aluminum tariffs were designed to score political points, and many of Trump’s advisers were veterans of heavy industry.
“US officials are looking at issues surrounding intellectual property and forced transfers [in China], but they haven’t figured out a way to weaponise it and inflict pain on China without hurting US companies,” said Kuijs.
Canada, Australia and the European Union voiced their opposition to the tariffs, but it is unclear if some countries will be exempt.
Much of the collateral damage with this round of sanctions will ultimately hit US allies, and trade officials have warned there could be retaliation.
“The imposition of a tariff like this will do nothing other than distort trade and ultimately, we believe, will lead to a loss of jobs,” said the Australian trade minister, Steven Ciobo. “My concern remains that on the back of actions like this we could see retaliatory measures that are put in place by other major economies. That is in no one’s interest.”