No Winners in Trade Wars

By Liz Lee, Laurie Chen, Ryan Woo

BEIJING (Reuters) – There are no winners in tariff or trade wars, nor in conflicts over science and technology, said China's top envoy to the United States.

Xie Feng, China's ambassador, emphasized that differences should foster exchanges and learning, not be used as excuses for confrontation. He noted that each country's successes present opportunities for the other.

Speaking at a U.S.-China Business Council dinner in Shanghai, Xie did not mention the U.S. election or Donald Trump, who previously imposed tariffs on billions of dollars of Chinese goods before reaching a truce in January 2020.

In 2019, China's economy grew 6.0%, the weakest in nearly 30 years, impacted by the trade war. The economy has further slowed, with the government targeting a 5.0% expansion in 2024, making it vulnerable to fresh trade tensions after Trump possibly resumes office.

Trump has proposed a blanket 60% tariff on U.S. imports of Chinese goods compared to the 7.5% to 25% tariffs from his first term.

Xie highlighted the importance of U.S. companies in China, stating that around 60% of McDonald's new stores were opened there, and Shanghai boasts over 1,000 Starbucks outlets.

He stressed that successful cooperation stories should increase, stating, "China and the U.S. can achieve many great things through cooperation."

Xie warned that attempts to suppress China would only lead to failure, asserting that if a new trade war starts, China would be ready to respond robustly.

Analysts predict that should tariffs be imposed, China might retaliate aggressively, as the experience of past concessions has not yielded benefits for China.

Julian Evans-Pritchard from Capital Economics remarked that a potential 60% U.S. tariff on Chinese goods would impact China’s GDP by less than 1%.