April 4, 2018 / 10:32 AM / 15 days ago

Chinese companies react to U.S. tariffs announcement

SHANGHAI/HONG KONG (Reuters) - China hit back on Wednesday at the U.S. government’s plan to slap tariffs on $50 billion in Chinese goods, retaliating with a list of similar duties on key U.S. imports, and adding to fears that the world’s two largest economies are heading towards a trade war.

Below are some of the reactions from some Chinese companies and trade bodies to Washington’s announcement of proposed tariffs on Chinese imports into the U.S.

China Eastern Airlines

The airline said on Wednesday that it could adjust capacity and frequency on the China-United States route in the expectation that the trade dispute could impact passenger travel and cargo. It has set up a group to come up with a relevant plan.

“A trade war is not good for the two countries. We hope that China and the United States can negotiate together to avoid a trade war,” said the carrier’s Chief Executive Ma Xulun.

When asked about the airline’s plane buying plans, he said that “it’s too early to say, we will keep an eye on the situation of the China-U.S. trade war.”

TCL Multimedia

A representative for China’s largest TV manufacturer said it plans to shift some TV production from its Huizhou headquarters in southern China to its factory in Mexico if the proposed tariffs are implemented.

He said the company expects the impact to be manageable as the U.S. accounts for just over 10 percent of its sales, and production capacity at its Mexican factory can be increased without huge additional costs. He added that the company also has a factory in Vietnam that can replace some of its China production capacity if needed.

China Chamber of Commerce for Import and Export of Machinery and Electronic Products

The industry body, which represents nearly 10,000 manufacturing firms, said the United States’ trade investigation into Chinese firms had “no factual basis”.

It noted in a statement published by state broadcaster CCTV that the Chinese government was ready to take equal measures on U.S. products to safeguard China’s interests and said it would give Beijing its full support.

COSCO Shipping

The shipping company said on Tuesday that there was currently little evidence that the tensions were affecting cargo volumes but noted that it had reduced U.S. capacity slightly over the past few years as part of a restructuring.

China’s largest shipping company, though, said that it was ready to take “appropriate action” to protect its market should it start to see an impact. It added that trade between China and the United States currently contributes to about 15 percent of its cargo volumes.

CRRC Corp Ltd

An executive at the train carriage maker, which has won contracts to supply Los Angeles, Chicago and Boston with metro cars, said it was still researching the impact of an announced 25 percent tariff on 1,300 Chinese products, including advanced rail equipment.

He said the company still needs to “carefully look at what items the list affects” before making an assessment.

He declined to be named as he was not permitted to speak to the media. A CRRC spokesman declined immediate comment.

Air China

The airline said last week that it did not expect to see any significant impact on the Chinese flag carrier’s passenger and cargo volumes.

“The relationship between the United States and China is a complementary one. It’s very strong. This trade war is like a game,” said the company’s board secretary Zhou Fen at a post-results briefing.

“We don’t think this issue will impact on our passenger and cargo volumes, there shouldn’t be much impact.”

(This version of the story corrects firms’ names to TCL Multimedia, not TCM Multimedia, and COSCO Shipping from COS Shipping)

Reporting by Brenda Goh in SHANGHAI and Sijia Jiang in HONG KONG; Additional Reporting by Tina Ge in HONG KONG; Editing by Martin Howell

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