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    14 Nov 2016

    China threatens to cut sales of iPhones and US cars if 'naive' Trump pursues trade war

    US president-elect Donald Trump would be a “naive” fool to launch an all-out trade war against China, a Communist party-controlled newspaper has claimed.
    During the acrimonious race for the White House Trump repeatedly lashed out at China, vowing to punish Beijing with “defensive” 45% tariffs on Chinese imports and to officially declare it a currency manipulator.
    “When they see that they will stop the cheating,” the billionaire Republican, who has accused Beijing of “the greatest theft in the history of the world”, told a rally in August.
    On Monday the state-run Global Times warned that such measures would be a grave mistake.
    “If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance and incompetence,” the newspaper said in an editorial.
    The Global Times claimed any new tariffs would trigger immediate “countermeasures” and “tit-for-tat approach” from Beijing.
    “A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”
    “Making things difficult for China politically will do him no good,” the newspaper warned.
    China’s foreign ministry has used more diplomatic language to caution Trump not to square up to Beijing.
    Foreign ministry spokesperson Lu Kang told reporters last week: “I believe that any US politician, if he takes the interests of his own people first, will adopt a policy that is conducive to the economic and trade cooperation between China and the US.”
    The excoriating editorial was printed hours after Trump spoke to China’s president, Xi Jinping. The president-elect’s staff said Trump thanked Xi for his well wishes and congratulations on his election victory.
    The statement read: “During the call, the leaders established a clear sense of mutual respect for one another, and President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward.”
    However, experts say officials in Beijing are still battling to untangle what a Trump presidency means for relations between the world’s two largest economies but wager he is unlikely to follow through on his most radical campaign pledges such as imposing 45% tariffs on “cheating China”.
    Paul Haenle, a veteran US diplomat who is director of the Carnegie-Tsinghua centre at Beijing’s Tsinghua University, said: “The biggest lesson that they draw from watching our presidential campaigns over the years is that he will become more realistic and more pragmatic once he is in the position where he has to govern. That is what they are hoping for when it comes to Trump.” 
    Haenle warned the introduction of protectionist measures would immediately “inject friction” into already fraught US-China ties as well as harming America’s own economy.
    “If he follows through on a 45% trade tariff then I think it will be damaging to our own interests and we will have fallout that will affect our own companies and our own economy and it won’t be effective. It will not achieve what he is setting out to achieve. So from that standpoint he is going to have to moderate some of that rhetoric as he puts together actual concrete policies.”
    Jorge Guajardo, Mexico’s former ambassador to China, said he too expected Trump to moderate many of his audacious campaign pledges when he took office.
    “He’s in the hot seat now. He has got to deliver. It’s not the same as campaigning,” he said.
    Guajardo said Trump’s bluster would be quickly replaced with more realistic talk as he understood that serious engagement with Beijing was now needed on a range of key issues including the Paris climate deal, North Korea and trade ties.
    Attempts to strike a deal would soon be set in motion with Trump and the Chinese president, Xi Jinping, likely to come together early in his presidency, Guajardo predicted. “He’s a deal-maker and nobody is more of a deal-maker than China.”
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