Zhong Shan, China's minister of commerce, said Sunday there would be "no winners in a trade war, and it would bring disaster to [China and the United States] as well as the rest of the world."

"China does not wish to fight a trade war, nor will China initiate a trade war, but we can handle any challenge and will resolutely defend the interests of our country and our people," Zhong said on the sidelines of China's annual parliamentary session in Beijing.

Read more: From pillar to post, the world's messiest trade disputes

US President Donald Trump signed an order on Thursday that places new import tariffs on steel and aluminum. Set to come into effect in 15 days, the new policy includes exceptions for imports from Mexico and Canada.

Calling steelworkers the "backbone of America," Trump called steel vital to US national security. He added that foreign steel dumping was an "assault" that put US companies and factories out of business. He urged companies to buy American steel and thus avoid import tariffs.

Read more: China dismay as Trump signs off steel, aluminum tariffs

Trade imbalance

The US purchased around 35 million tonnes of steel last year, which makes it the world's biggest importer of the raw material. South Korea, Japan, China and India accounted for 6.6 million tonnes of steel imports.

Although the US does not import a large quantity of steel from China, the Asian country's unprecedented industry expansion in the past decade has added to global surpluses of steel, thus driving down metal prices.

Last year, the US posted a $375 billion (€305 billion) deficit with China. But Commerce Minister Zhong Shang said the Trump administration was overstating the US trade deficit with China by about 20 percent annually. He instead blamed the imbalance on US controls over high-tech exports to China.

Beijing says Washington could reduce the trade deficit by allowing China to purchase advanced materials with military applications. The US government believes such sales would only marginally narrow the deficit and could put US national security under threat. 

Read more:

EU still in the dark over Trump's tariffs after meeting US representative

EU, Japan, other US allies ask for tariff exceptions

shs/jlw (AP, Reuters)