With economists warning of yet another US recession on the horizon, China’s top newspaper says an escalating US trade war will never bring the Asian power to its knees, but will make it stronger.
The Communist Party’s People’s Daily wrote in a front page commentary on Friday that China is as “firm as a boulder” in protecting its national interests and dignity in the face of Washington’s trade war.
Last week, the administration of US President Donald Trump raised tariffs on $200 billion of Chinese imports from 10 percent to 25, as the two sides appeared to be close to ending months of trade dispute.
A state media social media account said the United States is not sincere about wanting to resume trade talks with China and has damaged the atmosphere for negotiations with its recent moves.
US Treasury Secretary Steven Mnuchin said on Wednesday he will likely travel to Beijing soon to try to salvage talks aimed at ending their months-long trade war.
But China’s Commerce Ministry said on Thursday it had no information on any plans for a US trade delegation visit.
Taoran Notes, a WeChat account run by the Economic Daily, said in a post late Thursday that without sincerity there was no point in coming for talks and nothing to talk about.
“The US side has been saying it wants to talk, and at the same time has kept up with its little tricks, damaging the atmosphere for talks,” it said.
“There can’t be seen any substantive negotiating sincerity from the United States. Conversely, methods of extreme pressure are spreading,” the post added.
The post was republished by People’s Daily which also said, “The trade war can’t bring China down. It will only harden us to grow stronger.”
The paper said China’s confidence comes from the spirit of its people’s perseverance and endless struggle, citing major disasters like floods, SARS and 2008’s massive Sichuan earthquake.
Tensions worsened this week after the Trump administration added China’s Huawei to a trade blacklist, immediately enacting restrictions that will make it extremely difficult for the telecom giant to do business with US companies.
The order puts Huawei and 68 affiliates in more than two dozen countries on the blacklist. That bans the company from buying parts and components from American firms without US government approval.
Huawei denounced the move as “unreasonable”, saying the restrictions will not make the US safer, nor will it make the US stronger.
“It will only force the US to use inferior and expensive alternative equipment, lagging behind other countries… and ultimately harming US companies and consumers.”
Trump initiated what is effectively a trade war with China last year, when he first imposed unusually heavy tariffs on imports from the country. Since then, the two sides have exchanged tariffs on more than $360 billion in two-way trade.
China’s state planner, National Development and Reform Commission (NDRC), said on Friday the US war had some impact on the Asian country’s economy, but it was “controllable”.
It also said countermeasures would be rolled-out when needed to “keep economic operations within reasonable range.”
Amid the escalating war, US President Donald Trump has tried to put a rosy spin on the tumultuous situation.
Trump announced earlier this week that he will meet face-to-face with Chinese President Xi Jinping at the G20 summit late next month.
He even predicted that his meeting with Xi will likely be “very fruitful” and dismissed ongoing trade war with China as a “little squabble”.
But Taoran Notes said “if there is no new substantive action taken by the United States to address Chinese concerns, then even if they come to talk it will be fruitless,” Reuters reported.
US recession risk rises
A majority of economists surveyed by Reuters suggested Friday that the trade war has increased the risk of another economic recession in the US.
The economists put the chances of the recession happening in the next two years at 40 percent.
“I have a hard time thinking of a scenario in which a further escalation of the trade tension we currently have would not make recession risk higher,” said Michael Hanson, head of global macro strategy at TD Securities.
The US economy is forecast to have already lost considerable momentum, slowing to 2.0 percent in the current quarter from 3.2 percent in the first three months of the year, according to median forecasts from the latest monthly poll of 120 economists.
The US — a very consumer-reliant economy— imports hundreds of billions of dollars worth of goods from China, on which Washington has imposed tariffs.
Many Americans complain of lost export markets, disrupted supply chains and higher costs.
This is while China is trying to steer its economy away from exporting cheap goods and more toward domestic consumption.