Following is the transcript of an exclusive CNBC interview with Cui Tiankai, China Ambassador to the United States. The interview was broadcast on CNBC's Squawk Box Europe on 4 April 2018.
Interviewed by CNBC's Seema Mody.
Seema Mody (SM): You saw the list of new tariffs that were announced by the Trump administration, what is China's reaction?
Cui Tiankai: Good evening, you see we are against the so-called 301 investigation from the very beginning and today's announcement is another step in the wrong direction. We will certainly respond accordingly. We will resort to the WTO dispute settlement mechanism and we will in accordance with Chinese laws take measures to fight back. Maybe with the same intensity, the same scale.
SM: How exactly will China fight back? I mean the question of retaliation, we have already seen a new list of tariff's from China's side. Will we see more tariffs in the coming days?
Cui Tiankai: Well it will be announced in Beijing, very soon.
SM: Can you expand on what types of tariffs or sectors this could potentially impact here in the U.S.?
Cui Tiankai: We will see how much the U.S. measures will hurt our economy and we will fight back accordingly.
SM: What do you make of the list? The new list we got from the Trump administration, it's quite expansive, really focused on high tech, the semi-conductors. What kind of impact could this have on the Chinese tech industry?
Cui Tiankai: I think it will have negative impact clearly on Chinese economy, but it will also have a negative impact on the U.S. economy. Such protectionism would not protect anybody. It will not protect American workers or American farmers. It will not protect American business or American consumers. Actually it will hurt everybody, including the U.S. economy itself.
SM: What is the Chinese government's response to these allegations that Beijing is forcing U.S. companies to transfer valuable technology as a condition of doing business there?
Cui Tiankai: I think that these accusations are groundless. They never gave us specific cases of such accusations. But still, we are ready to have consultation with the U.S. side on any possible between us. But any measures of this nature of protectionism or unilateralism... You see that is the problem, people do not seem willing to have such consultations to address the issues in a constructive way, in a mutual and beneficial way. So if their choice is to have protectionist moves or even unilateral moves then we have to fight back.
SM: After the last round of tariffs, it were announced by the Trump administration on steel, what have the conversations been like between Washington and Beijing?
Cui Tiankai: We are always to continue and intensify our dialogue and communication with the U.S. side on any possible economic or trade issues. But, we need reciprocity. Our good-will has to be met by the same degree of good-will.
SM: Though it doesn't seem like you're getting that reciprocity right now, Ambassador. You realize if China does respond with stronger tariffs, this could really intensify this trade conflict between the U.S. and China. Is China ready for that, for a potential trade war?
Cui Tiankai: We certainly don't want to have any trade war with anybody. But people have to understand who started all this.
SM: And the treasury market, China is the biggest buyer of U.S. bonds. Is that a place that we could see retaliation? Will China reduce the number of U.S. bonds that it buys?
Cui Tiankai: You see our two economies, the Chinese economy and the U.S. economy, we're so closely interconnected so actually we do have a great deal of common interest. Any unilateralist measures will hurt the other side. But, the end result will be probably, it will hurt itself. So we have done our utmost to avoid this kind of situation. But, if the other side makes the wrong choice then we have no alternative but to fight back.
SM: But, Ambassador just lastly can you get specific on what type of retaliation we could see? Will it be soybeans, more agricultural tariffs or will it in fact be in the treasury market or the currency market?
Cui Tiankai: I think all this will be announced in Beijing very soon.
SM: And how serious is the Beijing government on this topic of showing the U.S. that it is willing and ready to participate in this trade war?
Cui Tiankai: You see the primary responsibility of the Chinese government is to preserve, protect and promote the interests of the Chinese people. So if anybody tries to hurt the interests of the Chinese people, it's a very serious matter for us, we will certainly fight back.
SM: Ambassador, there was one note from an analyst today that said watch the currency market, the USD-CNY pair. Is a yuan devaluation, is that something you've been hearing from your colleagues at the embassy or at the Beijing government as something that they're considering doing?
Cui Tiankai: You see in today's global economy almost everything is interconnected. So when people take some wrong measures, when people take some protectionist measures it will hurt people's confidence in the overall prospects for the economy and it may hurt finance, will hurt trade, will hurt economic performance, will hurt consumer confidence, everything.
SM: Well, we'll be certainly watching all those different factors as we await the specific around China's response and the retaliation that you just referenced. Ambassador, we will leave the conversation there. Thank you for joining us in this CNBC Exclusive interview.
For more information contact Jonathan Millman, EMEA Communications Executive: Jonathan.Millman@cnbc.com
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