China trade deficit draws critical Trump tweet


China accused U.S. President Donald Trump on Friday of damaging the global trading system by hiking steel and aluminum tariffs, while Japan and South Korea expressed alarm at potential economic costs.

"China does not want a trade war with the United States, but if the USA takes actions to hurt China's interests, China will not sit idly by and will take the necessary measures", Zhang said.

Canadian Foreign Minister Chrystia Freeland said Canada is prepared to take responsive measures to defend its trade interests.

Trump on Thursday pressed ahead with the imposition of 25% tariffs on steel imports and 10% for aluminum on Thursday, though he announced exemptions for Canada and Mexico, and said exceptions could also be made for other allies.

New Zealand International Business Forum executive director Stephen Jacobi said he did not want to dismiss those impacts but with just $39m of steel and $22m of aluminium exported to the U.S. the bigger risk was the damage that the United States could do to the framework of the global trade network. "Choosing a trade war is surely the wrong prescription, in the end you will only hurt others and yourself", Foreign Minister Wang Yi said.

"China will certainly make an appropriate and necessary response", Wang said at a news conference on the sidelines of the National People's Congress in Beijing.

Other officials at the EU, by far the biggest trading partner of the United States by value, have warned it could take counter-measures including European tariffs on U.S. oranges, tobacco and bourbon.

Exports fell 1.3 percent to $200.9 billion in January, and imports were flat at $257.5 billion.

Exports to neighbouring Asian economies (Hong Kong, South Korea, Taiwan) actually slowed down in February to 11% from 17%.

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Trump addressed trade with China in tweets on Wednesday, demanding that it lay out plans for reducing its trade surplus with the United States by $1 billion, which appeared to have been raised during a meeting with a top Chinese official last week.

Tokyo and Brussels rejected any suggestion that their exports to the USA threatened its national security, which is Trump's justification for imposing the tariffs despite warnings at home and overseas that they could provoke a global trade war.

In the first two months of 2018, China's exports of unwrought aluminium and products rose 26 percent to 817,000 tonnes, according to the General Administration of Customs. A $1 billion reduction is a drop in the bucket considering the fact that the US trade deficit with China in 2017 was $375 million.

Chinese leaders have threatened in the past to retaliate if Trump raises trade barriers, but now need to weigh whether to back up those threats with action and risk jeopardizing US market access for smartphones and other exports that matter more to their economy than metals.

China's global trade surplus widened to US$33.7 billion from January's US$20.3 billion.

China wants the speedy conclusion of another regional trade pact, the RCEP, in which Australia is also a negotiator. "For the US, there are plenty of reasons to avoid tipping relations with China into an all-out trade war".

Europe has also warned president Trump to expect retaliatory strikes against iconic American products such as Levi's jeans, Harley-Davidson bikes and bourbon whiskey, among others.

Trump is said to be looking to toughen rules on Chinese purchases of US firms, such as adding curbs in industries where American businesses do not have reciprocal access to acquiring Chinese counterparts.

Beijing's steady accumulation of multibillion-dollar trade surpluses with the United States has prompted demands for import controls.