China reassures US companies it won't retaliate against them - report

Author: Adam Button | Category: News

China tells US executives that companies won't be targeted

Chinese leaders appear to be privately backtracking on threats of retaliation against American companies in a trade war, the WSJ reports.

At a meeting last month, Liu He, President Xi Jinping's economic-policy chief, told visiting American business representatives that U.S. companies' China operations won't be targeted in Beijing's trade-brawl counterattacks. "We won't allow retribution against foreign companies," Mr. Liu said, according to people briefed on the event.

It makes some sense. The companies will be already hurt by US tariffs. Those will hurt American consumers via price increases. It's counter-productive to hit Chinese investment by getting into a tit-for-tat. There's no backtracking from countervailing tariffs but openly targeting companies beyond that would cause long-term damage. It would probably be better to remain a steady hand, attract investment and wait for US consumers or Congress to squeal.

"Beijing is looking to U.S. companies to help it lobby the Trump administration for a negotiated settlement," the WSJ says.

At the same time, this is only one source and you certainly can't rule out China hitting back in some way or another.ForexLive

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