China warns USA sanctions will void trade talks

The latest round of trade talks between the United States and China ended over the weekend with a chilly warning from Beijing that all agreements could be voided if the United States moves ahead with plans to level import tariffs against $50bn (£37bn) worth of Chinese goods. The Chinese statement said the two sides "achieved positive and concrete progress" on Sunday, but the process should be "based on the premise" the two sides would "not fight a trade war".

USA commerce secretary Wilbur Ross said at the start of the meeting with China's top economic official, vice premier Liu He, that they would discuss specific American exports China might buy.

At the outset of the event Ross said the two sides had discussed specific American exports China might purchase, but the talks ended with no joint statement and neither side released details. But just nine days later, a White House statement declared the US intention to place a 25 percent tariffs on $50 billion worth of Chinese imports, focusing on technology products.

Last month China promised it would import more from the U.S.in a bid to narrow a trade surplus of €321 billion.

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.

In an editorial, the official state-run China Daily said the outcome of the weekend talks suggested both sides had continued to take a constructive approach, but warned of Trump's unpredictability.

Trump is threatening to hike duties on up to $150 billion of Chinese imports, with Beijing vowing to retaliate in kind.

China has responded by warning that it would end its agreement to buy more U.S. goods if the sanctions were imposed, while He argued that Trump was following this path for political reasons and warned "China will not serve the USA to meet its domestic political needs". "We believe that regarding problems in the China-U.S. trade and economic relations, the two countries should work out a win-win and mutually beneficial resolution through dialogue and discussion with sincerity and in the spirit of equality and mutual respect". This impasse, however, leaves Trump administration to deal with many of China's industrial policies including the issue of the Chinese telecommunications company ZTE, which had violated sanctions against both North Korea and Iran as of late.

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

"Global trade is not a 'gunfight at the OK Corral, '" he said.

Bruno Le Maire, France's finance and economy minister, also called the US tariffs unjustified.

That might alienate allies who share complaints about Chinese technology policy and a flood of low-cost steel, aluminum and other exports they say are the result of improper subsidies and hurt foreign competitors.

"We know that President Trump's way of doing business is very personal and the fact that he is going to have direct interactions with the leaders of the countries most affected by these measures gives us hope", Hammond said.

While many countries share USA frustration with Chinese trade and economic practices, critics of US policy under Trump have warned that Washington risks alienating the European Union, Canada and Mexico with 25 percent tariffs on steel and 10 percent on aluminum.

Before Beijing joined the World Trade Organization in 2001, such "technology transfer" often was an explicit requirement for foreign companies that wanted access to China's state-dominated economy. He also pushed back against the argument that Canadian steel poses a US security threat.

That position is unlikely to satisfy the Trump administration. For example, China has resisted Washington's demands to eliminate government-backed policies that the US says favor domestic companies to adopt advanced technologies.

China will also open its financial services market to foreign companies, and lift foreign ownership restrictions on electric auto manufacturers, prompting Tesla to register a company in Shanghai last month.

  • Rogelio Becker