China Preparing to Counter Any Trade Penalties by U.S.

The government of China has sought advice from its policy advisers and different think tanks on how it can counter possible trade penalties by President Donald Trump of the U.S.

The advisers believe President Trump will likely impose higher tariffs for targeted sectors in China where the country has a large surplus with the U.S., such as furniture and steel, or on firms that are state owned.

China might respond with its own actions like finding other suppliers of products in the agricultural field or manufactured goods or machinery, while cutting exports of different consumer staples like laptops or mobile handsets.

Other options would be imposing a tax or other types of restrictions on big firms in the U.S. from operating inside China or by limiting access to the fast growing services arena in China.

Beijing was a target of the rhetoric of Trump during his election campaign in 2016, and officials see that friction will be inevitable because of the large trade surplus of China, according to a number of sources involved with internal conversations.

The Chinese government’s PR arm, the State Council Information Office, and its Ministry of Commerce would not return requests for comment.

Both sides have room to resolve the problems through consultation and cooperation instead of resorting to retaliatory action, said one policy advisor.

China premier Li Keqiang last week said that the government of China did not what a trade war on its hands with the U.S. and urged discussions between the two sides so common ground could be achieved.

Steven Mnuchin the Secretary of the Treasury last week said that President Trump’s administration did not want to have any trade wars, but trade relationships amongst certain countries needed to be looked at against to make sure they were fair to workers in the U.S.

No major measures by the U.S. have been named, and there were not any indications publicly of intentions by Washington on trade during the weekend, when Rex Tillerson the U.S. Secretary of State was visiting China.

Next month, President Trump is expected to have a visit from Xi Jinping the President of China.

However, a look at an uncertain future, came about Saturday in a message after a meeting of the finance ministers of the G20 took place in Germany in which a pledge was said to keep global trade free as well as open. This came after two days of meetings did not yield any compromise on the increase of U.S. protectionism.

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