Donald Trump risks damaging some of America’s best-known brands if he pursues trade tariffs against China, the US has been warned, as Beijing unveiled a huge fiscal package to prop up the economy.
Xie Feng, China’s ambassador to the US, warned the president-elect against introducing a 60pc tariff on imports from the country, saying there would be “no winner” in a trade war between the two.
The ambassador added that some of the US’s best-known companies such as McDonald’s and Starbucks would suffer as a result, given their extensive businesses in China.
Mr Xie said: “Tariff war, trade war, tech war or industrial war would produce no winner. Protectionism only locks one in backwardness and costs them the future.
“Among the new outlets of McDonald’s opened last year, about 60pc were in China. And Starbucks is running more than 1,000 stores in Shanghai, topping the world. Both are success stories of mutual benefit. The more such success stories of mutual benefit, the better.”
His comments came as China announced a 10 trillion renminbi (£1.1 trillion) lifeline to indebted local governments on Friday. However, Beijing stopped short of launching a full stimulus package, which economists said gave it headroom to respond to a potential trade war under the incoming US president.
China’s economy has rebounded from the pandemic more slowly than initially anticipated and a crunch in its property market has threatened a wider crisis.
Lynn Song, the chief economist for greater China at ING, said Mr Trump’s election may prompt a further round of stimulus to come soon.
He said: “The initial market response appears to be negative; one potential impact of a Trump victory on China was its potential impact on the stimulus response, and markets may have been hoping for a larger-than-expected stimulus.
“However, there may be more to come once policymakers have more clarity on what a new Trump administration may do next year.”
Mr Xie’s choice of McDonald’s has a personal resonance for Mr Trump, coming just weeks after the Republican made the business a key part of his election campaign.
Mr Trump mocked Kamala Harris’s claim to have worked in the restaurant by donning an apron to serve chips from behind the counter in a branch in Pennsylvania.
Mr Trump also has a personal fondness for McDonald’s food. He ordered Big Mac burgers to the White House when hosting a dinner for college football champions during a government shutdown in 2019. The then-president called it “great American food”.
In a speech to the US-China Business Council in Shanghai, Mr Xie called for continued growth of American businesses in China.
