China warns all trade deals are ‘void’ if US imposes tariffs, other trade measures


Posted

June 03, 2018 23:46:39

China has warned the United States that any agreements reached on trade and business between the two countries will be void if Washington implements tariffs and other trade measures, as the two ended their latest round of talks in Beijing.

Key points:

  • White House renews a threat to impose 25 per cent tariffs on Chinese high-tech goods
  • China says the two sides should meet each other halfway, not fight a trade war
  • Wilbur Ross says his meeting with Liu He has been “friendly and frank”

The warning came after delegations led by US Commerce Secretary Wilbur Ross and China’s top economic official Vice Premier Liu He wrapped up a meeting on Beijing’s pledge to narrow its trade surplus.

Mr Ross said at the start of the event they had discussed specific American exports China might purchase, but the talks ended with no joint statement and neither side released details.

The White House threw the meeting’s status into doubt on Tuesday (local time) by renewing a threat to impose 25 per cent tariffs on $US50 billion ($66 billion) of Chinese high-tech goods in response to complaints Beijing steals or pressures foreign companies to hand over technology.

The event went ahead despite that but Beijing said it reserved the right to retaliate.

Tuesday’s announcement revived fears the conflict between the two biggest economies might dampen global growth or encourage other governments to raise their own barriers to imports.

“The achievements reached by China and the United States should be based on the premise that the two sides should meet each other halfway and not fight a trade war,” said the Chinese statement, carried by the official Xinhua News Agency.

“If the United States introduces trade sanctions including raising tariffs, all the economic and trade achievements negotiated by the two parties will be void.”

The American Embassy in Beijing did not immediately respond to a request for comment.

Mr Trump is pressing Beijing to narrow its politically volatile trade surplus with the United States, which reached a record $US375.2 billion ($495.7 billion) last year.

Tensions eased after China promised on May 19 to “significantly increase” purchases of farm goods, energy and other products and services following the last round of talks in Washington.

US Treasury Secretary Steven Mnuchin said the dispute was “on hold” and the tariff hike would be postponed.

Trade truce under threat after US announcement

That truce appeared to end with Tuesday’s surprise announcement. It said the White House also would impose curbs on Chinese investment and purchases of US high-tech goods and on visas for Chinese students.

Analysts suggested Mr Trump might be trying to appease critics of his administration’s deal to allow Chinese telecom equipment giant ZTE Corp to stay in business.

They said those political pressures meant the technology-related tariff hikes were likely to go ahead.

Mr Trump has threatened to raise tariffs on a total of up to $US150 billion ($198 billion) of Chinese goods. Tuesday’s announcement gave no indication whether the other increases might also go ahead.

China has threatened to retaliate by raising import duties on a $US50 billion ($66 billion) list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice.

It criticised Tuesday’s announcement but refrained from repeating its earlier threat.

Beijing has resisted US pressure to commit to a firm target of narrowing its annual surplus with the United States by $US200 billion ($264 billion).

Private sector analysts say while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor.

Mr Ross was accompanied by agriculture, treasury and trade officials for the meeting at the Diaoyutai State Guesthouse, a leafy compound on Beijing’s west side. Mr Liu’s delegation included China’s central bank governor and commerce minister.

Mr Ross and Mr Liu held a working dinner on Saturday ahead of their talks.

“Our meetings so far have been friendly and frank, and covered some useful topics about specific export items,” Mr Ross said at the opening of Sunday’s meeting.

The US pressure over technology policy reflects growing American concern about China’s status as a potential competitor and complaints Beijing improperly subsidises its fledgling industries and shields them from competition.

Foreign governments and businesses cite strategic plans such as Made in China 2025, which calls for state-led efforts to create Chinese industry leaders in areas from robots to electric cars to computer chips.

AP/Reuters

Topics:

trade,

world-politics,

china,

asia,

united-states



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