American companies would be the first to suffer when a China-U.S. trade war takes place between the two countries, said Chinese Premier Li Keqiang at a press conference in the closing of the 5th session of the 12th National People’s Congress (NPC).
Li was asked by a reporter on the threats entailed of a China-U.S. trade war. U.S. President Donald Trump has sworn to impose heavy duties on products coming from China.
The Premier’s warning is of great significance as a meeting between Trump and Chinese President Xi Jinping is being planned.
The White House has verified that negotiations are proceeding to set up the meeting of Trump and Xi. If negotiations are successful, this will be the first meeting between the two leaders.
"A trade war would not make our trade fairer," said Li at the press conference in the concluding session of the NPC.
"If there were a trade war, it would be foreign-funded companies, particularly U.S. firms, that would first bear the brunt," the Chinese Premier added.
Li based his statement on the conclusion of a study by a "reputed" international think tank. He did not give details on the identity of the think tank.
"A closed-door policy or beggar thy neighbor approach will not make anyone the winner," he continued.
The Premier’s statement seems directed to the Trump’s “America First” policy.
In the policy, the U.S. president insists that American companies manufacture their goods inside the country, with the goal of providing jobs to the people. He warned of harsh taxation penalties to those who will not follow the policy.
Many American companies source their products from China in order to cut production costs. In that case, a China-U.S. trade war will force the firms to have in-house production, possibly putting the companies’ income at the edge.