China defiant on Trump’s trade war, but some fear it hurts them, too

President Donald Trump may have struck a conciliatory tone in recent days, saying he was optimistic of making a deal to end his trade war with China. But on the streets of Beijing, the mood was mainly one of defiance at the tit-for-tat.

“We have never been afraid of anyone,” said Yang Fang, who sells toy guns at a market in the city. He believes the trade war is “just an attempt by the U.S. to maintain its hegemony and stop China’s development.”

On Monday, Trump claimed that U.S. officials had spoken with their Chinese counterparts and that they “want to make a deal.” However, Chinese foreign ministry spokesman Geng Shuang said he was not aware of any calls between the nations.

The state-controlled China Daily newspaper said Tuesday that “China wants to make a deal, but that deal can only be reached based on equality and mutual respect.”

Trump’s comments, made at the G-7 summit in France this weekend, were an apparent pivot after the latest salvos were fired last week between the world’s two largest economies. Beijing announced new tariffs on $75 billion of U.S. goods in retaliation for Washington’s own tariffs on $300 billion of imports from China.

In response, Trump tweeted that he would be hiking tariffs on a combined $550 billion of Chinese goods, and he also “ordered” U.S. businesses that deal with China to begin looking for alternatives. Experts say that in reality such a drastic measure would be legally and politically messy.

Trump’s comments at the G-7, though the president’s words did not receive widespread coverage here.

Dong Jian, a taxi driver in Beijing, was among many who reacted defiantly to Trump’s part in the eye-for-an-eye trade exchanges.

“If you don’t need our 1.4-billion-people market, fine,” he said, referring to China’s status as the world’s most populous country. “We don’t like the trade war, but if we are being bullied we will fight back.”

“Remember you are only some 300 million. Let’s see what happens to your soybeans,” he added, a reference to U.S. agricultural imports.

It’s true that the trade war has at least the potential to cause pain for U.S. businesses and consumers.

New calculations from JPMorgan found that if the new tariffs take effect as planned they will cost the average American household around $1,000. And the American Chamber of Commerce in China said some 75 percent of its members — U.S. companies and individuals operating in China — told a survey in May that the trade war is having a negative impact on their businesses.

But it is also causing pain for Chinese companies, such as textile exporters in Suzhou profiled in a South China Morning Post report in June. Overnight into Monday, China’s currency, the yuan, sank to an 11-year low not experienced since the 2008 financial crisis.

Trump tweeted that China had lost “five million jobs” because of the trade war in the past year. He appeared to be referring to estimates by China International Capital Corp, a bank.

The U.S. has some advantages, Eswar Prasad, a senior fellow at the Brookings Institution, wrote earlier this month. Its economy is 50 percent larger and relies less on imports and exports, “so the near-term pain will be greater for China,” wrote Prasad, who is also a professor on trade policy at Cornell University.

However, China may also have some benefits, such as its command economy, dominated by state-run enterprises, and one-party state that may be better equipped at stopping bad economic news from spreading among its people.

China’s Commerce Ministry denounced the latest U.S. moves as “unilateral, protectionist bullying and extreme pressurizing” and warned that the U.S. will have to “eat its own bitter fruit.”

Jennifer Jiang, a college student, agreed with the official line.

“The bigger loser in a trade war will be the Americans, especially low-income Americans, because they will be paying more for their needs,” she said.

She added that “here in China, we don’t really feel the effects of trade war, we have everything,” she said, pointing to the well-stocked shelves in a grocery store.

Yang, the toy gun vendor in the Beijing market, said it was not only about economics.

“The Chinese have the ability to endure great hardships, but I doubt if the Americans can endure hardships, too,” he said.

Not everyone is so bullish.

Fang Zheng is the manager of Good Neighbor, a convenience store chain in Beijing. He believed that “China has no choice but to fight back against increased tariffs, but in the end we prefer a peaceful resolution.”

Han Dongdong, who works for the Swedish telecoms company Ericsson, said he was worried about the impact the trade war might have on China’s youth.

“We don’t feel any effects now,” she said while shopping for shoes. “But if it continues, our economy will be affected, so China and the U.S. should try to find a compromise.”

Trump has long since criticized China for what he deemed unfair practices, accusing it of manipulating its currency and carrying out flagrant intellectual property theft.

“This trade war is probably because the Americans think we have deceived them or we have not kept our promise,” said Abbot Zhang, a marketing agent for a children’s basketball training camp. He reckons Trump might have a point.

“We should therefore try to work out agreements with the Americans and prove that we will carry them out,” he said.