China and the European Union vowed to oppose trade protectionism and unilateralism, saying those actions could push the world into recession in an apparent rebuke to the US.
Vice Premier Liu He—President Xi Jinping’s top economic adviser—said China and the EU had agreed to defend the multilateral trading system, following economic talks Monday in Beijing. The comments, made at a press briefing with European Commission Vice President Jyrki Katainen, come as both sides prepared to face off against US President Donald Trump’s tariff threats, Bloomberg reported.
The talks were taking place at a time when “unilateralism is on the rise and trade tensions have appeared in major economies,” Liu said. “China and the EU firmly oppose trade unilateralism and protectionism and think these actions may bring recession and turbulence to the global economy.”
Both China and the EU have recently come under pressure from Trump on trade. The bloc imposed tariffs on $3.3 billion of American products Friday in response to US barriers on imports of aluminum and steel, triggering threats of further tariffs on European cars from Trump.
Later this week, the US Treasury Department is expected to release fresh rules on Chinese investment in technology companies, putting additional pressure on China.
The US is due to impose tariffs on $34 billion of Chinese imports from July 6, and Trump has threatened to impose levies on another $200 billion of Chinese goods. If that threat is realized, it could cut as much as half a percentage point off China’s economic growth, and also hit the American economy, economists have said.
“If we are to have a trade war with China, it would be best to win it. We should be better off after the fighting. Unfortunately, the chances of this happening seem slim to none, because Trump’s plan of attack suggests that everyone—us and them—will lose. Interestingly, there’s broad agreement over some of our war goals,” economist Peter Navarro, director of the White House National Trade Council, wrote in the Wall Street Journal.
The Financial Times says Chinese investment in America could tumble, if Trump blocks China from buying into US tech companies. According to the Rhodium Group consultancy, Chinese foreign direct investment in the US plunged more than 90% to just $1.8 billion in the first half of 2018 compared with the same period last year.
