China sharply rejected a U.S. trade investigation into alleged industrial overcapacity on Friday, warning it may respond with countermeasures. The dispute casts uncertainty over imminent trade discussions as negotiators from both nations prepare for a fresh round of talks.
According to a statement from China’s Ministry of Commerce, Beijing contends that the United States lacks the authority to decide unilaterally if another country has excessive production capacity, questioning the legitimacy of the U.S. Section 301 trade investigation. The U.S. Trade Representative recently announced a probe into 16 economies, including China, citing concerns over “overcapacity.”
A spokesperson from China’s Foreign Ministry dismissed accusations of forced labor, characterizing such claims as fabricated by the United States. The Commerce Ministry also asserted that decisions on what constitutes overcapacity cannot be made solely by the U.S. and maintained that global production and consumption are closely linked, requiring continued international supply-demand coordination.
Chinese officials highlighted that the World Trade Organization has previously determined tariffs resulting from 301 investigations to be inconsistent with WTO obligations. China’s government is currently reviewing the specifics of the U.S. inquiries and has indicated it may take necessary steps to safeguard its interests if warranted.
These trade tensions add to the complex set of issues US President Donald Trump and China’s President Xi Jinping are expected to address when they meet in Beijing at the end of March. In advance of that summit, upcoming talks in France—confirmed Friday by China’s Commerce Ministry—are intended to establish a framework for further negotiations.
