Trump's trade war still doesn't scare China

BEIJING — China’s second highest-ranking official delivered a confident message Wednesday amid the looming trade war with the United States: Beijing will survive.

The remarks from Premier Li Keqiang to a crowd in the port city of Tianjin seemed directed at President Trump — without invoking his name — as fresh tariff announcements bring the United States and China closer to an all-out out trade war.

“China’s development over the past decades has always been achieved by overcoming all sorts of different obstacles and challenges,” he said, a day after Beijing pledged to immediately punch back at Trump’s next round of tariffs on $200 billion in Chinese imports with levies on an additional $60 billion in American goods.

“Each time, we managed to pull through,” Li added.

The escalation pushes the United States and China toward what analysts consider a financially risky cliff. By next week, the world’s two largest economies could be on track to impose levies on the $635 billion worth of goods traded annually between them.

Trump has framed the conflict as a necessary fight, arguing China has been breaking the global trade rules for years at the expense of American workers. The battle is popular among some labor groups: union leaders in the Midwest have long blasted China for luring away factories with cheaper labor, and the White House has accused Beijing of stealing intellectual property from U.S. companies that enter its market. 

The looming onslaught of tariffs, Trump has said, should pressure Beijing to change its ways.

“China has been taking advantage of the United States on Trade for many years,” he tweeted Tuesday. “They also know that I am the one that knows how to stop it.”

If the Chinese government follows through with its threat to retaliate Sep. 24, Trump has pledged to strike back with duties on $267 billion in Chinese products. At that point, both sides will have nearly run out of imports to target.

Subject to tariffs of up to 10 percent are electronics, furniture, chemicals, handbags, spark plugs, human hair — items ordinary and niche that have become shipping container fixtures over the four-decade commercial relationship. 

[China says it will immediately retaliate when Trump tariffs take effect]

Neither country can avoid pain in this trade war, economists warn. The cost of household goods is expected to rise, since global supply chains weave through the Asian nation. Chinese economists predict layoffs in the country’s manufacturing sector. American farmers and business owners, meanwhile, fear they’ll lose access to the lucrative Chinese market: a middle class of consumers larger than the entire U.S. population. 

Technology billionaire Jack Ma, chairman of the e-commerce giant Alibaba, offered a bleak projection Tuesday as both countries dug in their heels. 

“It’s going to last long, it’s going to be a mess,” he said at a conference in Hangzhou. “Maybe 20 years.”

The celebrity businessman did not, however, point the blame squarely at Trump.

“China must open the market,” he said. 

In his talk Wednesday, China’s premier — whose political rank is second only to President Xi Jinping — admitted the country had its weak points. 

China’s main stock index has dropped more than 20 percent since January, with losses climbing after Trump fired off the first set of tariffs. 

“Indeed, we’re facing greater difficulties in keeping a stable performance for the Chinese economy,” Li said, adding that China will crack down on bad actors that abuse the opportunities of global commerce by swiping trade secrets from brands and business partners. 

Li also admitted the vast majority of China’s workforce is unskilled — only around 11 percent have any kind job training or higher education, he said — and the country’s average income per worker ranks on the world’s lower end ($8,250 annually, per World Bank data).

But China will continue to flourish, he said, by focusing on its homegrown talent and easing the path for budding entrepreneurs. The country’s e-commerce scene, home of the online retail giants Alibaba and JD.com, has skyrocketed, Li pointed out, with consumer spending driving 60 percent of China’s economic growth. 

Read more:

Trump threatens tariffs on $267 billion in Chinese goods

Businesses beg for tariff relief as trade war with China rolls on

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