China’s President Xi Jinping on Wednesday said that there would be “no winner” in any global trade war, in a direct warning to US President Donald Trump who has threatened to slap levies on all Chinese imports.
“A trade war should be rejected because there will be no winner,” Xi said at the opening of a BRICS summit of emerging economies in Johannesburg.
“Unilateralism and protectionism are mounting, dealing a severe blow to multilateralism and the multilateral trading regime,” he said, without mentioning the United States by name.
“We are facing a choice between cooperation and confrontation, between opening up and closed-door policy and between mutual benefit and a beggar-thy-neighbour approach.
“The international community has again reached a new crossroads.”
Leaders of the BRICS emerging economies — Brazil, Russia, India, China and South Africa — are holding an annual three-day summit, with attention focused on the threat of a US-led global trade war.
At the same time, European Commission president Jean-Claude Juncker is meeting with US president Donald Trump on Wednesday at the White House to try and de-escalate the looming trade war.
Trump has said he is ready to impose tariffs on all US$500 billion of Chinese imports, complaining that China’s trade surplus with the US is due to unfair currency manipulation.
Trump has already slapped levies on goods from China worth tens of billions of dollars, as well as tariffs on steel and aluminium from the EU, Canada and Mexico.
“It is difficult to deny that the global market sentiment continues to be manipulated in large extents by the trade war uncertainties, which many think represent the largest risk to the world economy since the global financial crisis,” Global Head of Currency Strategy and Market Research at FXTM Jameel Ahmad told AFP.
“The concern that South Africa has with the protectionist policies by President Trump at this stage, is that it is playing havoc with the local market.”
Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Brazilian President Michel Temer are attending the summit, along with several African leaders invited as guests.
“We are concerned by the rise in unilateral measures that are incompatible with World Trade Organisation rules, and we are worried about the impact of these measures,” South African President Cyril Ramaphosa told the summit’s opening session
New BRICS unity?
The BRICS group, comprising more than 40 per cent of the global population, represents some of the biggest emerging economies, but it has struggled to find a unified voice.
Analysts say US trade policy could give the group renewed purpose.
Sreeram Chaulia, of the Jindal School of International Affairs outside Delhi, told AFP that BRICS leaders “concur that the US has unleashed punitive trade wars that are hurting all the BRICS members”.
“They have a collective interest in promoting intra-BRICS trade. The urgency this time is greater,” he said.
Xi arrived in South Africa after visiting Senegal and Rwanda as part of a whistlestop tour to cement relations with African allies.
Signalling diplomatic rivalry over influence in Africa, India’s Modi visited Rwanda and Uganda on his own five-day tour of the continent including the BRICS summit.
The meeting opened on Wednesday with a business forum, before the heads of state hold talks on Thursday.
African leaders attending a “BRICS outreach” programme on Friday include Paul Kagame of Rwanda, Joao Lourenco of Angola, Macky Sall of Senegal and Yoweri Museveni of Uganda.
“South Africa, and Africa more broadly, can benefit from increasing exports to fast-growing countries like India and China,” Kenneth Creamer, an economist at Johannesburg’s Wits University, told AFP.
“BRICS has the strategic potential to re-shape world trade.”
Turkish leader Recep Tayyip Erdogan will also attend a summit as the current chair of the Organisation of Islamic Cooperation (OIC) and will meet Putin on the summit’s sidelines.