BEIJING — China reacted with cautious criticism Friday to President Trump’s plan to impose tariffs on imported steel and aluminum, urging the United States to abide by multilateral trade rules and do nothing to damage the fragile global economic recovery.
“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans — Levi’s,” European Commission President Jean-Claude Juncker said, according to the Reuters news service. “We cannot simply put our head in the sand.”
China is the world’s dominant steel producer, but experts said the tariff plan would not greatly affect it because the country accounts for only 2 percent of U.S. imports. Beijing is not about to start a trade war over the decision, they added, framing it as self-
defeating.
“What an extremely stupid move,” said Li Xinchuang, vice secretary general of the China Iron and Steel Association. “A desperate attempt by Trump to pander to his voters, which I think in fact runs counter to his ‘America First’ pledge.”
Li, who is also director of the China Metallurgical Industry Planning and Research Institute, said the tariffs would only make U.S. industries fall further behind globally at a time when “China is in its prime.”
Foreign Ministry spokeswoman Hua Chunying said Friday that world trade would be harmed if other countries follow the U.S. example. “The basis for the global recovery is still unstable,” she said. “All countries should make concerted efforts to cooperate to resolve the relevant issues, instead of taking trade-restrictive measures unilaterally.”
It is not clear whether the tariffs would affect only certain countries or apply globally.
The tariff proposal met with more outrage in Europe, particularly in Germany, where Foreign Minister Sigmar Gabriel called it “unfathomable.”
“With this, the declaration of war has arrived,” said Bernd Lange, a German Social Democrat and head of the European Parliament’s trade committee, speaking on German public radio. “They have a mercantile trade model in their heads that dates back 200 years.”
Although Germany exports more steel to the United States than any other European country, last year it accounted for just 3 percent of U.S. steel imports, through September. Far more originated in Canada, South Korea and Mexico, countries that also have raised major concerns about the policy.
But many European officials see the tariffs as part of broader fears they have about Trump’s “America First” agenda, given the bloc’s long-standing reliance on U.S. partnership. Lange and others also worry that the tariffs could be expanded to other fields, such as computers.
“It’s a bottomless pit,” he said.
France also condemned the move. In a strong statement Friday, Bruno Le Maire, France’s economy minister, said that if a trade war ensues between the United States and the European Union, there will be “only losers.”
Top British government officials had no immediate public comment, but a senior representative of Britain’s steel industry warned that the tariffs could have a “significant impact.”
“Measures such as these smack of short-termism, protectionism, and would be rife with unintended consequences for global trade and for the users of steel in the U.S.,” said Richard Warren, head of policy at U.K. Steel.
The possibility of global trade frictions unsettled markets Friday, with Asian and European stocks following their U.S. counterparts lower. “Tariffs on steel and aluminum are not the end of the world,” said Richard Jerram, chief economist at the Bank of Singapore. “The risk is escalation. How aggressively China reacts and America’s response to that will worry the markets.”
Later Friday, Reuters reported that the European Union is considering imposing duties on U.S. imports worth about $3.5 billion if the White House pursues its plan. An E.U. official confirmed the report, saying, “This is broadly the figure we are looking at.” The official was not authorized to discuss the matter publicly and spoke on the condition of anonymity.
Trump’s move is also expected to trigger legal challenges at the World Trade Organization by China, the European Union, Brazil and perhaps others. Wei Jianguo, a former Chinese vice minister of commerce, said the U.S. decision runs counter to WTO rules and hurts Sino-U.S. relations.
“China does not want to see a trade war with the United States. But if Trump insists, China is not afraid of it,” Wei said, noting that China imports a huge amount of U.S. goods, including Boeing planes, and agricultural and IT products.
But most analysts said the move is more of an irritant to China than anything serious at this stage.
Lu Zhengwei, chief economist at Industrial Bank in Shanghai, said China had already been working to cut overcapacity in its steel industry. Anti-dumping duties imposed on China by the Obama administration two years ago also had helped cut U.S. imports, experts said. Last year, China’s steel exports fell 30 percent, and Lu said Trump’s move came too late to make much of a difference.
Still, Beijing is not insensitive to the symbolism of the decision, aware that Trump’s rhetoric has targeted it and wary of further measures to restrict trade and investment, experts said.
“China has to respond and fight for every inch of its own interests,” Lu said. “However, the result we are expecting is negotiation between both sides.”
The Trump administration is investigating China over intellectual property rights and technology-transfer policies and is expected to unveil more tariffs or penalties in coming months. Congress is also likely to strengthen and broaden controls on Chinese investment in the United States.
Andrew Polk, a founder of the Trivium consultancy in Beijing, said China’s response to the tariffs probably would be more rhetorical than real. He predicted a similar reaction to the one that followed Trump’s decision to slap tariffs on solar panels: “We don’t like this, but we’re going to downplay it and not really do anything.”
Trump’s announcement came as President Xi Jinping’s top economic adviser, Liu He, was in Washington trying to ease trade tensions. Hua, the Foreign Ministry spokeswoman, said the envoy had held “constructive consultations” with U.S. officials Thursday and shared a candid exchange of views.
Rob Carnell, head of Asia-Pacific research at ING in Singapore, said China might join or hide behind other nations and trading blocs — such as Canada, the European Union, Japan and South Korea — in retaliating against the U.S. move. Taiwan and Brazil are also among those affected by the measure.
Working through the WTO could take a long time, he said, making “tit-for-tat retaliation” more likely. That would not be good news for the global economy, he said.
But ironically, it might not be bad news for China. Many will now wonder whether the United States is not a greater threat to the world trading system, said Arthur Kroeber, managing director of the Beijing-based research firm Gavekal Dragonomics.
“China can afford to play it pretty cool and measured, as they have been doing ever since Trump took office,” Kroeber said. “They take a small, really negligible, hit to their steel and aluminum exports, but strategically they come out way ahead by just letting Trump be Trump.”
Noack reported from Berlin. Luna Lin, Shirley Feng, Amber Ziye Wang and Liu Yang in Beijing, James McAuley in Paris and Quentin Ariès in Brussels contributed to this report.