US would be hard hit if trade war breaks out, warns China

Li Keqiang's comments came ahead of Chinese President Xi Jinping’s key summit with his US counterpart Donald Trump, who has labelled China a currency manipulator and threatened to slap hefty tariffs on its imports.  “We do not want to see any trade war breaking out between the two countries. That would not make our trade fairer,” Li said at his annual news conference at the end of the annual meeting of China’s parliament. 

Last year, the United States’ deficit in trade in goods with China reached $ 347 million and Trump has promised to close that gap, which he has also attributed to what he calls China’s rigged currency exchange policies. Li said that a trade war of tit-fortat protectionist measures would ultimately damage the American economy.  “If there were a trade war, it would be foreign-funded companies, particularly US firms, that would first bear the brunt,” he said, citing an article written by an international thinktank. The first meeting between Xi and Trump may take place next month in Florida.