China To Protect Interests Over US Sanction Threat

China on Saturday warned it would take necessary measures to protect its interests if the US imposes tough trade sanctions against its steel and aluminium exports.

The US Commerce Department on Friday recommended imposing heavy tariffs on China and other countries to counter a global glut in steel and aluminium, laying out an array of possible options in a report to President Donald Trump.

The move gives Trump the opportunity to strike a highly public blow for his "America first" trade policy -- he is due to decide on the measures next month -- but has stoked fears of retaliation and a trade war between the world's two largest economies.

"If the United States' final decision affects China's interests, we will take necessary measures to defend our rights," said Wang Hejun, a director at China's commerce ministry, in a statement responding to the US report.

The US report framed concerns about Chinese overproduction in terms of national security and defence -- an approach refuted by Wang.

"The findings of the investigations (of the US Department of Commerce) are groundless and do not correspond to reality," he said.

Washington "should not lightly adopt restrictive measures under the pretext of 'national security' ... a vague formula that can easily lead to abuse," he said.

China produces about half of the world's steel but supplies less than two percent of the steel imported by the United States.

The US and EU argue Chinese overproduction is heavily subsidised by the state and has depressed world prices, hurting their own domestic production.

Trump on Tuesday accused Beijing of decimating American steel and aluminium industries, saying he was "considering all options". (AP)