Trump has imposed a heavy 25% duty on Chinese exports worth $34 billion. Washington sees it as an effort to counter the high trade deficit caused by Chinese exports. A senior Chinese official said the judiciary must be prepared to face bankruptcy-related cases

BEIJING: A senior Chinese government official predicted on Thursday that aggressive trade actions imposed by US President Donald Trump would result in bankruptcy for many Chinese companies if immediate measures were not taken to check the fallout.

“It’s hard to predict how this trade war will develop and to what extent,” Du Wanhua, deputy director of an advisory committee to the Supreme People’s Court, said. “But one thing is sure: if the US imposes tariffs on Chinese imports following an order of $60 billion, $200 billion, or even $500 billion, many Chinese companies will go bankrupt.”

Trump has imposed a heavy 25% duty on Chinese exports worth $34 billion and has threatened a 10% duty increase on another set of exports worth $200 billion. Washington sees it as an effort to counter the high trade deficit caused by Chinese exports by making them dearer in the US.

China has taken some retaliatory steps but many Chinese intellectuals are not happy with the official response to a situation that might be heading towards a trade war.

Du said the judiciary must be prepared to face bankruptcy-related cases and deal with complexities it has not handled earlier. “Preparedness ensures success. Unpreparedness spells failure,” he said. “Our courts need to look into these possible Chinese corporate bankruptcies as early as possible.”