*TEHRAN – China will respond as necessary in the event of a trade war withthe United States, Foreign Minister Wang Yi said on Thursday, while warningthat such a war would only harm all sides.*

March, 08, 2018 – 11:57 Other Medialink>

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US President Donald Trump is expected to establish tariffs of 25 percent onimported steel and 10 percent on imported aluminum this week, but the WhiteHouse has said there could be a 30-day exemption for Mexico and Canada andsome other countries based on national security.

Such a move aims to counter cheap imports, especially from China, thatTrump says undermine US industry and jobs.

Trump’s administration has faced growing opposition to the tariffs fromprominent congressional Republicans and business officials worried abouttheir potential impact on the economy.

Trade tension with the United States has jumped to the top of the list ofrisks facing China this year, Zhou Hao, senior emerging markets economistat Commerzbank, told the Reuters Global Markets Forum this week, and itslatest data showed exports surging 44.5 percent in February from a yearearlier.

Wang, speaking on the sidelines of an annual meeting of China’s parliament,said China and the United States did not have to be rivals, and historyshowed that trade wars were not the correct way to resolve problems.

“Especially given today’s globalization, choosing a trade war is a mistakenprescription. The outcome will only be harmful,” Wang said.

“China would have to make a justified and necessary response,” he said.

Wang said China had a long way to go on its path of modernization, and thatit “will not and need not displace the United States”.

Trump addressed trade with China in tweets on Wednesday, demanding that itlay out plans for reducing its trade surplus with the United States by $1billion, which appeared to have been raised during a meeting with a topChinese official last week.

“China has been asked to develop a plan for the year of a One BillionDollar reduction in their massive Trade Deficit with the United States,”Trump tweeted, without saying where the message had been conveyed.

In the tweet, Trump mistakenly referred to a deficit where China runs asurplus. It was also not clear if he meant that amount, which would only beabout 0.27 percent of the record $375.2 billion goods trade surplus Chinahad with the United States last year.

Trade tensions between the world’s two largest economies have risen sinceTrump took office in 2017, and although China only accounts for a smallfraction of US steel imports, its massive industry expansion has helpedproduce a global glut of steel that has driven down prices.

‘Few Alternative Sources’

The US tariffs are expected to go into effect in two months, thougheconomists see little immediate impact on China.

Capital Economics estimates China’s exports of steel and aluminum to theUnited States account for less than 0.1 percent of its gross domesticproduct, as both are already limited by anti-dumping measures.

“On paper, China has more to lose from a trade war – it exports far more tothe US than it imports. But there are few alternative sources for the mainproducts the US buys from China,” the research firm said in a note onWednesday.

US soy beans, aircraft and cars are widely seen as vulnerable to possibleretaliation from Beijing.

Trump is also considering trade sanctions against China under a “Section301” investigation into its intellectual property practices and pressure onforeign companies for technology transfers.

Diplomatic and US business sources say the United States has all but frozena formal mechanism for talks on commercial disputes with China because itis not satisfied it has met its promises to ease market restrictions.

China’s latest trade data released on Thursday showed its February exportsup 44.5 percent from a year earlier, beating market expectations, whileimports grew 6.3 percent, according to Reuters.

That left it with a trade surplus of $33.74 billion for the month, and aJanuary-February trade surplus with the United States of $42.92 billion.

China’s trade performance rebounded in 2017 and logged a strong start thisyear thanks to robust demand at home and abroad.

But the tensions with the United States are clouding the outlook forexports, while a cooling property market may curb domestic demand forimported raw materials such as iron ore.