Targeting U.S. automaker signals possible China retaliation over Trump talk

Wed Dec 14, 2016 11:05pm EST
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By Arshad Mohammed, Matt Spetalnick and Benjamin Kang Lim

WASHINGTON/BEIJING (Reuters) - China's plan to punish a U.S. automaker accused of price-fixing is a sign of how Beijing could retaliate if President-elect Donald Trump upends decades of relations between the two nations.

Trump's assertion that the United States need not be bound by the policy that Taiwan is part of "one China" would erode a bedrock of U.S.-China ties that has underpinned the vast increase in trade and cooperation between what are now the world's two largest economies.

Few expect the disagreement will lead to outright military confrontation, nor even the kind of economic war that many feared could be launched by Trump's threat during the U.S. presidential campaign to slap tariffs of up to 45 percent on Chinese imports.

However, a rising China has plenty of other ways to push back hard if Trump presses on the Taiwan question, which most analysts see as the most sensitive part of the U.S.-China relationship.

In what might be a shot across the bow of the Trump administration, due to take office on Jan. 20, the official China Daily newspaper quoted a state planning official saying China will soon penalize an unnamed U.S. automaker for monopolistic behavior. While the official said no one should read "anything improper" into this, shares of General Motors Co and Ford Motor Co skidded.

Auto industry sources have told Reuters this specific investigation was already underway before Trump's recent comments.

However, the manner in which it was announced, by saying only that it was a U.S. automaker before a formal announcement of fines, has raised questions around whether officials might be seizing on the case to send a shot across the bow of the incoming Trump administration.

Jason Miller, a spokesman for Trump, said on Wednesday Trump's team was aware of the report but it would be premature to comment.   Continued...

The People's Republic of China flag and the U.S. Stars and Stripes fly along Pennsylvania Avenue near the U.S. Capitol during Chinese President Hu Jintao's state visit in Washington, DC, U.S. on January 18, 2011. REUTERS/Hyungwon Kang/File Photo