President Trump says, WTO offers 'advantages' to China and is unfair to US.



President Trump has said that the World Trade organisation is 'unfair' CREDIT:  CHIP SOMODEVILLA/GETTY IMAGES NORTH AMERICA
China receives special treatment from the World Trade Organisation and it is unfair to the US, President Donald Trump has said on social media, raising questions about how useful the multilateral organisation will be as a tool for de-escalation in the emerging trade conflict between the two nations.

“China, which is a great economic power, is considered a developing nation within the World Trade Organisation. They therefore get tremendous perks and advantages, especially over the US. Does anybody think this is fair. We were badly represented. The WTO is unfair to US,” Mr Trump tweeted.

China had so far positioned itself as a defender of free trade in the row, claiming that it would, as far as possible, look for resolution via the WTO, the global regulator for trade between countries.

Mr Trump had previously called the organisation a “catastrophe” and said that it “makes it impossible for us [the US] to do good business”. Hopes had remained among economists and analysts that the WTO would offer a route to de-escalation, however.

The tweet comes after China warned that an all-out trade war between the US and China could threaten the “whole world’s economic recovery”.

The country is also prepared to retaliate in a trade conflict with the US with “any measures”, a government spokesman confirmed on Friday.  

Gao Feng, a Chinese ministry of commerce spokesman, said: “If multilateralism and liberal trade are threatened the economic globalisation will be ruined and the whole world’s economic recovery will be affected and threatened severely."

The ministry of commerce’s remarks followed a threat from the US administration to add additional tariffs of $100bn (£71bn) on Chinese goods. Should President Trump follow through and impose these taxes, that would bring the total toll to $150bn worth of Chinese imports.

Mr Gao said: “The US made the wrong decision and took the wrong action. The result of this action will harm themselves.”

He added that should the new $100bn of tariffs be imposed then China had a “fully prepared” plan of retaliation “and will not hesitate to act”. The form of this retaliation is a major concern for markets. China cannot easily expand the number of goods it targets much further, as it imports less from the US than vice versa.

David Dollar, Chinese economic expert at the Brookings, said China’s response to US protectionism was being decided at the highest level. 

Mr Dollar said: "President Xi Jinping cannot appear weak and there is strong public support for China to take a firm line in response.

"China also can make life difficult for American firms operating in China. I doubt that they would manipulate their currency as part of the response because that could cause problems with other trading partners. 

"The US dollar may well appreciate if a full-blown trade war develops because that is the kind of global shock during which investors usually head for the safe haven of the US."

The regime could up the level of tariffs from 25pc on the already-listed targeted goods. It could also make it hard for US firms to operate in China. Other options could include selling some of its large stockpile of close to $1.2 trillion US treasuries. Such action would potentially weaken China's currency and "cause problems with other trading partners", Mr Dollar said.

Mr Gao said that these extra tariffs and the trade conflict they could provoke was the US “lifting a rock only to drop it on their feet”. The developing conflict was a battle between “freedom of trade and protectionism,” he added.

Acknowledging that the US might be harmed in a trade war,  Mr Trump told the "Bernie and Sid" radio show on 77 WABC Radio that it could result in "a little pain". He added: "We're going to have a much stronger country when we're finished."

The heated statements from either side come after China said on Wednesday it would levy a 25pc tariff on about $50bn of US imports, many of which come from politically sensitive areas for Mr Trump ahead of crucial US midterm elections.

The list of goods included soybeans, beef, whisky, lubricants and aircraft. The move was made in response to the release by the US of a list of proposed tariffs a day earlier, covering $50bn in Chinese goods. They followed a section 301 investigation into Chinese trade, into allegations that Chinese firms had repeatedly stolen billions worth of intellectual property from US counterparts.

In signs of further escalation White House economic adviser Larry Kudlow told Bloomberg TV on Friday that the administration was “considering a second round of tariff actions”.

President Trump says, WTO offers 'advantages' to China and is unfair to US. President Trump says, WTO offers 'advantages' to China and is unfair to US. Reviewed by Lenin Dornala on April 06, 2018 Rating: 5

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