China sent a no-nonsense message to the United States on Thursday, with a Chinese commerce ministry spokesman saying that “The malicious practices of the United States are like opening Pandora’s Box, and there is a danger of triggering a chain reaction that will spread the virus of trade protectionism across the globe.” The minister hinted that tariffs on Chinese products could start a domino effect that will eventually do more harm than good for the U.S. economy.
China’s comments came after US. President Donald Trump announced on Wednesday that he will give a 60-day grace period before imposing the tariffs, and that it is likely to take years before U.S-China trade relations reach a “good place.”
In an interview with CNBC on Thursday, Terry Branstad, the U.S. ambassador to China, said that Beijing has not treated American companies fairly, causing the trade deficit to continue growing. One example he cited was that of Facebook which is banned in China while China’s WeChat is available in the U.S.
Meanwhile, in Japan, Deputy Prime Minister Taro Aso said on Thursday that there is no chance of opening up talks for a bilateral trade deal with the U.S. as such talks would not help Japan, even if it exempted the country from U.S. tariffs. “Japan only exports special steel products in which it has outstanding market share and U.S. companies cannot produce,” Aso said. “If U.S. companies want these products, they need to buy them from Japan. It will be U.S. companies that suffer.” Japan’s opposition to bilateral trade talks is stuck on the U.S. demand for Japan to open up its highly-protected agricultural markets which Aso thus far has refused to consider.
Asian markets were trading mixed on Thursday afternoon, with the Nikkei 225 and the Hang Seng Index posting modest losses while the Shanghai Composite managed to eke out a 0.57 percent gain as of 1:35 p.m. HK/SIN.
The yen, often used as a safe-haven during turbulent political times, failed to attract investors on Thursday in light of the tensions between Aso and Trump, declining against the dollar to trade at 106.47 The dollar was lower against most of its other trading partners, easing against the euro to $1.2334, as well as against the Canadian dollar, the Swiss franc and the pound.