Published: Sun, June 03, 2018
Worldwide | By Isabel Fisher

China warns US no deal if tariffs go ahead

China warns US no deal if tariffs go ahead

The appeal came ahead of planned weekend talks with Commerce Secretary Wilbur Ross on USA pressure to narrow China's multibillion-dollar trade surplus with the United States.

Mnuchin, speaking at a G7 finance leaders meeting in Canada where he was the target of USA allies' anger over steel and aluminum tariffs, said the China talks would cover other issues, including the Trump administration's desire to eliminate Chinese joint venture requirements and other policies that effectively force technology transfers.

U.S. Commerce Secretary Wilbur Ross, second from left, and Chinese Vice Premier Liu He, fourth right, attend a meeting at the Diaoyutai State Guesthouse in Beijing, June 3, 2018.

The statement said, "If the United States introduces trade sanctions including increasing tariffs, all the economic and trade achievements negotiated by the two parties will not take effect".

No formal trade deals came out of that meeting, but China agreed last month to "significantly increase purchases of United States goods and services", according to a White House statement.

State news outlets have portrayed the ZTE decision as having been made by Mr. Ross's Commerce Department, and they have suggested that it is merely a bargaining ploy as part of trade negotiations. China slammed the "flip-flop", vowing to hit back should the USA tariff threat materialize. China pledged to take steps to "substantially" reduce the US trade deficit, including by buying more American farm goods and energy, though it didn't commit to a dollar amount.

President Donald Trump is pressing Beijing to narrow its politically volatile surplus in trade in goods with the United States, which reached a record $375.2 billion a year ago. It said the White House also would impose curbs on Chinese investment and purchases of USA high-tech goods and on visas for Chinese students. That comes at the same time Trump has riled some of America's closest allies with the imposition of tariffs on steel and aluminum imports.

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.

Gai Xinzhe, an analyst at Bank of China's finance institute in Beijing, told Bloomberg that "China is concerned over the U.S.'s unpredictability, especially after Trump turned an about-face on tariffs".

But Beijing warned all the results were premised on "not fighting a trade war".

After a three-day meeting of finance ministers from the G7 industrial nations that ended Saturday in Canada, Canadian Finance Minister Bill Morneau issued a summary saying the other six members want Trump to hear their message of "concern and disappointment" over the USA trade actions. Treasury Secretary Steven Mnuchin, who announced the tariff truce with China, said at the G7 summit in Canada that the United States was pushing for "structural changes" to the Chinese economy.

French Finance Minister Bruno Le Maire warned a trade war could begin in "a few days".

Ross arrived in Beijing on Saturday for talks after the Trump administration renewed tariff threats against China, and with key USA allies in a foul mood toward Washington after they were hit with duties on steel and aluminum. The tariffs are meant to pressure Beijing for allegedly stealing trade secrets and forcing foreign companies to hand over technology in exchange for access to the Chinese market.

The EU has responded to the United States announcement with a 10-page list of tariffs on U.S. goods ranging from Harley-Davidson motorcycles to bourbon.

Allies including Canada and the European Union are threatening retaliatory tariffs.

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