After U.S. solar tariff, China calls protectionism a two-edged sword

BEIJING (Reuters) – Protectionism is a double-edged sword that will harm both sides, China’s foreign ministry said on Wednesday after U.S. President Donald Trump signed into law a steep tariff on imported solar panels.

The tariff of 30 percent is among the first unilateral trade curbs imposed as part of a protectionist agenda to help U.S. manufacturers, but which has alarmed Asian trading partners that produce lower cost goods. The administration also put a tariff on imported washing machines.

China, the world’s biggest solar panel producer, has already branded the move an “over-reaction”.

“Protectionism is a double-edged sword. It not only wounds others but wounds themselves,” foreign ministry spokeswoman Hua Chunying told a daily news briefing.

But China is confident in its own economy, which this year will see the scale of domestic consumption overtake the United States for the first time, she said, citing comments the previous day by Chinese Foreign Minister Wang Yi in Chile.

“This means that after 2018, the world’s biggest market will be China,” Hua said, adding that the market had been developed on the back of people’s sweat rather than having been snatched away from anyone.

However, some economists remain skeptical.

“It’s impossible China’s consumption will surpass the U.S. in 2018,” said Tang Jianwei, an analyst at the Bank of Communications in Shanghai.

“Consumption accounts for 70 percent of the U.S. economy, while in China it only accounts for 30 percent,” he said. “And China’s economy is not as large as the U.S.’s yet.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.