US, Chinese companies brace for escalating trade war
Beijing: Companies and trade groups in the US and China have expressed concern over how the escalating trade spat between the world's two biggest economies could affect operations.
Beijing retaliated immediately to tariffs on tens of billions in Chinese imports imposed by US President Donald Trump on Friday, igniting a trade war that threatens to cut into the pair's massive bilateral trade – potentially harming exporters and US multinationals keen on China's huge market.
Top among American products hit with duties by China are agricultural exports, with soybeans, sorghum, oranges, pork, poultry and beef included in the USD 34 billion in goods targeted for higher border taxes starting next month.
Agricultural trader Cargill, the largest US private company, called for dialogue between Beijing and Washington so businesses, farmers and consumers would not be caught up in an all-out trade war.
"Trade conflict... will lead to serious consequences for economic growth and job creation and hurt those that are most vulnerable across the globe," said Devry Boughner Vorwerk, a vice president at Cargill.
A spokeswoman for grain trader Archer Daniels Midland also said bilateral dialogue should be pursued, adding that China "continues to be an important export market for American food and agriculture".
The announcements cap months of sometimes fraught shuttle diplomacy between Washington and Beijing, in which Chinese offers to purchase more US goods failed to assuage Trump's grievances over a soaring trade imbalance and the country's industrial development policies.
Beijing has left the door open to negotiations, even as it matched Washington with tariffs and bellicose rhetoric.
"The Donald Trump administration has once again proved inconsistent and precarious," state-run newspaper China Daily said in an editorial Saturday.
It added that given the "frequent flip-flopping" in the US, "it is still too early to conclude that a trade war will start".
US trade groups also stepped up their criticism, while some large companies such as Boeing said they were beginning to evaluate the tariffs' possible effects.
Boeing garnered about 12.8 per cent of its 2017 revenues from China and is frequently seen as among the more vulnerable US multinationals to a full-on trade war.
"We are assessing the impact these tariffs and any reciprocal action could have on our supply chain and commercial business," said Boeing spokesman Charles Bickers.
"We will continue to engage with leaders in both countries to urge a productive dialogue to resolve trade differences, highlighting the mutual economic benefits of a strong and prosperous aerospace industry," he added.
The American Apparel & Footwear Association – while praising the Trump administration for dropping an earlier plan to place levies on key equipment and machinery used by the industry – said that China's retaliatory measures could harm American farmers and textile manufacturers and add costs to the industry's supply chain.
US automakers, which have targeted China as a key growth market, are also slated to be hit by the bruising tariffs.
American automobile giant Ford has sold 338,386 cars thus far in China in 2018, about one-third the number in the US, and had welcomed a Chinese plan to lower tariffs on auto imports.