If you ask China, the North Korea nuclear issue and U.S.-China trade relations have nothing to do with one another—or at least they shouldn’t.
News of potential trade action against China for its intellectual property infractions emerged from the Hill this week, and though nothing was concrete, talk had potential duties pegged as a possible punishment for China.
[Read more on the state of U.S.-China trade relations: Trump May be Poised to Take Aggressive Trade Action Against China]
Since then, China has warned the U.S. that actions like this would do little for either nation’s position.
“We both win through cooperation. We both are hurt in a fight,” China Commerce Ministry spokesperson Gao Feng said in a statement posted on the ministry’s website.
The goal, at least on China’s side, seems to be avoiding a trade war, but according to The Wall Street Journal, the country is prepared to target American businesses if Washington goes ahead with trade sanctions.
President Trump has voiced his displeasure with China and its inability both to improve its trade imbalance with the U.S. and rein in North Korea and its nuclear missile development. Trump had alluded to making trade concessions for China in exchange for its aid in dealing with North Korea, but that hasn’t panned out as the president hoped. As such, it seems Trump may want to initiate a case under Section 301 of the 1974 Trade Act, which would essentially allow the Administration to take action against China for unfair trade practices and avoid the World Trade Organization, which has been the body to handle these matters since its inception.
Despite its public interest in keeping the peace, China’s retaliation could hit the U.S. wherever it hurts most, like agriculture or aircraft—industries where the U.S. has a considerable trade surplus.
“Usually China will not respond in the same industry sector,” William Zarit chairman of the American Chamber of Commerce in China, told The Wall Street Journal. “They may target industries and products that will cause equal pain.”