Trump tariffs risk ‘dividing world’, says Xi Jinping

Donald Trump’s planned trade tariffs on goods from China and the rest of the globe risk “dividing the world”, Xi Jinping has warned.

The Chinese president said measures to curb trade would be like “going back in history” as the country braces for higher US tariffs ahead of the American president-elect taking office.

Mr Trump has threatened to implement 60pc tax on all imports into the US from China, and 10pc to 20pc on products from other nations.

Mr Xi said: “Blocking economic cooperation under various excuses and dividing an interdependent world is going back in history.

“The world has entered a new period of turbulence and change. Unilateralism and protectionism is spreading, the fragmentation of the world economy is intensifying. Economic globalisation is faced with severe challenges.”

Mr Xi’s warning comes as Western nations start cracking down on what they view as unfair practices by Beijing and bringing in retaliatory tariffs.

The American president-elect is considering the new import taxes, having long complained of Chinese abuse of the trading system. Criticisms have included its high tariffs on goods sold into China, subsidising products then dumping them cheaply on other nations, and industrial espionage.

Other Western nations have similarly voiced concerns over China’s approach to trade. The European Union has accused Beijing of “predatory” industrial practices, heavily subsidising the production of goods such as solar panels. It claims this allows Chinese exporters to undercut European manufacturers and so dominate the market.

Brussels’s investigation into the electric vehicle market found similar “unfair subsidisation”, prompting it to impose import tariffs of 35pc on battery-powered Chinese cars.

In his speech on Friday, Mr Xi indicated that he wants China and its allies to have a larger role setting the terms of global trade, implying less influence for nations including the US and European economies.

The Chinese president said: “We need to correctly guide the development of economic globalisation, not to follow the old path of letting a few countries wage hegemony.

“We need to push economic globalisation to unleash more positive effects and enter a new stage that is more dynamic, more inclusive and more sustainable.”

Economists have warned a trade war risks slashing global economic growth, undermining a recovery from the pandemic which has already in many cases been mediocre.

Forecasts from the National Institute of Economic and Social Research indicate US GDP will be 4pc lower after five years of a trade war than it would be without new tariffs, while for China the equivalent hit could be 2.1pc.

The eurozone’s GDP risks being 1.1pc lower than it would be without a trade war, while the projection for the global economy is that it could miss out on growth equivalent to 2.1pc of GDP.

Broaden your horizons with award-winning British journalism. Try The Telegraph free for 3 months with unlimited access to our award-winning website, exclusive app, money-saving offers and more.