China Threatens Trade Retaliation

China Daily: Move to protect US steelmakers is against norms of world trade

It is clear that national security is only an excuse to justify the real aim of blocking foreign products to benefit the domestic steel industry. The probe, which will be led by Ross, could result in recommendations on curbing steel imports that will affect the interests of a number of the US' major trade partners, including China.

Yet reducing imports of foreign steel products will not alter the weak competitiveness of US steelmakers. Instead, if the US does take protectionist measures, then other countries are likely to take justifiable retaliatory actions against US companies that have an advantage over those countries in fields such as finance and high-tech, leading to a tit-for-tat trade war that benefits no one.

China is not tailoring its response to the American people, but to the American elites. This will usually work, but now populism is rising. During a period of negative social mood, a large segment of the population on both sides of the political aisle would consider it a bonus if Wall Street and some high tech companies such as Apple or Google are collateral damage in a trade war.