China prepares to counter possible trade sanctions

China’s government has been seeking advice from its think-tanks and policy advisers on how to counter potential trade penalties from President Trump, preparing for the worst. Policy advisers believe the Trump administration is most likely to impose higher tariffs on targeted sectors where China has a big surplus with the United States, such as steel, or on state-owned firms. China could respond with actions such as finding alternative suppliers of agriculture products or machinery and manufactured goods, while cutting its exports of consumer staples such as mobile phones or laptops, source told Reuters. Other options include imposing tax or other restrictions on big US firms operating in China, or limiting their access to China’s fast-growing services sector, they added. Beijing was a particular target of Trump’s rhetoric during last year’s election campaign, and officials see some friction as inevitable due to China’s large trade surplus.